Do not buy Office now, as there is a new version coming out in January, and the current version is not a Universal binary, so it can slow down at times on intel Macs. Personally, iWork does everything I need it to do, and does it very well at a much lower price than Microsoft Office. You can also try NeoOffice which is free.
The best advice you will get is this: there are free demos available for both Office and iWork. Download the demos, give them a try, and decide for yourself.