iWork is very good if you want to do presentations and almost a desktop publishing. However, if you need to maintain full compatability with the pc world which uses mostly Word, then get Word as you will run across Word docs that iWork will probably not handle.
Neooffice and Open Office will give you good compatability with Word and are both fine office programs, and free, still if you need complete compatability then MsWord is really your only choice. For the 90% who don't need the full compatability then Neo office, Open Office, and iWork do very nicely at far less cost.