Coming from the PC, I am more familiar with Office and have Office files, but I like the iWork demo that is installed on Leopard. I also had Office 2004 on it but I didn't like it too much.
What do you think is better overall? Can iWork read Office 2003/07 files? I haven't tried that yet. I just need to be able to send something out (like a resume) in Office format.
What do you need? What's your budget?
If you need Office, get Office. If you must read and write Office-compatible files, share with other Office users, etc., then that seems the best way to go.
If you're an experienced Office user and don't want to learn new programs, staying with Office will likely be easier than switching to iWork.
If you need the features and power of Office, stay with it. There are things iWork just doesn't do -- particularly in Numbers.
If you have more modest needs, iWork is a good package.
If you have a tight budget, and every dollar counts, iWork is half the cost of Office.
If you just want a different set of software for doing Office-type things, iWork is a fun solution.
I'm a pretty savvy Office user; it's a regular tool at work. But at home, I've bought iWork 08 and am switching wholly to it. (I've got Office 2004 installed, just in case). iWork is a mixed bag. Keynote is amazing. Numbers's core concept is good and I can do what I need in it. But it's clearly a first effort and lacks many handy details from Excel. Pages, I've not used yet except to look at a few Word documents.
As a home user, interested in saving money, not doing serious office work, iWork is a good choice.