I have Office '08 and iWork '08, as well as Office '07 on my Windows laptop.
I almost never have to do spreadsheets so Excel/Numbers will almost never be found on my Dock. I do a lot of word processing and presentations, so I'm a vet of Office for Windows and Mac and have been using iWork for a little over two years now.
I like iWork '08 and Office '08 a lot but for different reasons; if I am doing a document that I know will be sent around to multiple people who use Office, I will probably do it in Office--if I'm doing a document for me, or if the recipient(s) will be using iWork, I will do it in iWork. Yes, I can export from iWork to Office document formats, but I've had minor issues in the past w/ formatting that I don't care to have to fix later.
On average I spent maybe 80% of my time in Pages/Keynote, and the rest in Word '08--I rarely use Powerpoint '08 although it's an excellent presentation program, no complaints but it does look 'dated' compared to Keynote.
Pages is a little cumbersome for someone who is an Office vet and uses shortcut keys like mad. Most of the keys are the same but some of the ones you would least expect are moved elsewhere (CTRL-R in Office is now Command+Shift+} ). Yeah I know, I'm picky...
Office '08 has a lot of things Pages doesn't, like Equation Editor which allows you to enter math symbols directly into the word doc. You can use Grapher or install LaTeX to do the same in Pages, but it's a lot easier in Office. I also find the grammar checker in Word is a lot more robust than that of Proofreader in Pages.
If you're a college student, you can get by w/ iWork just fine but Office is pretty much the bread/butter and will have everything you might ever need it to do. The last Mac version of Office I bought was in '03 (Office X) and it lasted me up until this latest version. I've had iWork since the 2005 version and it's gotten a lot better, but could use some improvements to be on-par with Office.
In my opinion iWork is a better value than Office, but Office is still king.