NeoOffice really is the best free office suite out there for Mac. OpenOffice.org should be making its own native Aqua version soon, so that may or may not be better. IBM is releasing Lotus Symphony based on OpenOffice.org code, so that may be more polished, but it will still be free. I'm not sure if the Mac version is ready yet. But for a whole office suite, you already have the best currently.
For just a free Word replacement, I hear Abiword and Bean are pretty good. Try those out. I'm not sure if they have templates, though.