I's true that iWorks has the option of exporting projects in Microsoft format and PDF...but the other reason i would choose iWorks over Microsoft Office is because it was built for Mac and not ported over from Windows. Any Microsoft product you install on your Mac will scatter files to different places on ur hdd just like on a Windows PC...A mac product on the other hand keeps everything compacted away in it's Application program which makes it easier to get rid of everything if you ever choose to delete it. Anyways I suggest I works over Microsoft Office anyday! I hope my opinion could help...and remember it's just my opinion..!
While I'm not usually someone to endorse Microsoft (was joking with another composer friend the other day that now that he has a Mac he should be using AIFF files in his ProTools projects no WAVE on principle), just to be fair I thought I would correct some of this.
I don't know for sure about now, but around the turn of the century (first time I've said that I think) the Mac Business Unit was developing the Mac version of office independently from the Windows version with their only communication really being about file format compatibility. If you compare the Mac and Windows versions of Office you will see that the interface and features are not the same so while there may be some related code brought over from Windows for Office 98, it really isn't a port. Don't forget, Word and Excel were originally written for the Macintosh and ported to Windows/DOS.
I don't have iWork installed at the moment so I can't speak for that for sure, but hardly any software you install will keep everything in the .app package. Many programs I use (Apple software included, e.g. iLife) will put the application in your Applications folder and more support files in your local user folder and/or your root level user folder--so I really don't think that is a reason to use one over the other.
Now not that I use iWork, there are a few good reasons I would list to use it: price, you prefer cocoa software on principle (I assume iWork is a little more efficient), you like to avoid Microsoft on principle, or you like the iWork interface better (I know people who switched to pages after many years of Word for that reason). Since iWork can save Office compatible files, any one of those reasons might be enough to use iWork. On the flip side, I've read that there are some more specific Office file format stuff that will not always import correctly into iWork (keep in mind, I only hear this from word of mouth, haven't experienced it myself). File compatibility is one reason why I stuck with Office, but it is mainly Excel--while I don't think Excel was worth giving Bill access to prototype Macintoshes, I've been using it since the mid-80s on a Mac Plus and don't see Numbers as offering anything to me. Now, little Word bugs have bothered me and made me think about using Pages, so maybe in a few years once the software has grown a little more I may give it another chance.
EDIT: In addition to being a composer/musician, I also do some development I think Microsoft's proprietary practices are bad for developers and users, so in general I would try to avoid their products I suppose (sadly, I've got Windows in a VM for testing, Office, and Silverlight, so unlike my personal boycott in the 90s using Claris Works, I'm kind of stuck). But man, from when I used to do web stuff, I REALLY hate IE. Just had to throw that in so I don't feel guilty since I suppose this sounds like a Microsoft endorsement.
In fact, one of the original PowerPoint developers is still with MacBU -- that's more than 20 years of being a Mac developer! 