While I'm usually working with Adobe Indesign for most of my work, I still find it much simple to create a nice document in Pages. First of all, it's an apple software. This means that it is really tightly integrated with the rest of the system. A big plus for me.
Second, when I drag and drop in an image, it is automatically moveable. And the option to either follow text or free of it is very easy to find in the inspector. Sure it's there in Word as well, but it is definitely much harder to find considering that it has so many 'features' around.
Word is meant for Word processing, (whatever that is). Pages on the other hand can handle both Word processing and page layout. For instance, with text boxes, which are now linked for flowing text. It's almost as good as Indesign is. I am forever looking for where to draw text boxes in Word.
Where does this leave us? Word seems to be geared up with a whole lot of features which most people don't use. Sure there will be some business types who use all those weird ones, but for the regulars, Pages is mighty enough (and mighty cheaper I might add).
I would also highly recommend anyone who is working with a lot of Windows PCs (and passing Doc files to and fro) to get MS Office cause while the capability is there in Pages, it's far from perfect.
@Dellinger: The save as option usually signifies that the application is capable or reading and writing that file properly. Pages on the other hand can't properly read Doc files, neither can it write them properly. So in order to keep someone from saving their important file as a "Doc" file, and later opening it to find that it's completely borked, the option is to "Export" it. So you have your original Pages file, but have the capability of exporting to Word.