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I have both. iWork's real attraction as mentioned is Keynote which is far superior to PowerPoint. However, Word beats Pages. And Excel really has no competition at the moment although Numbers looks promising...
 
If you have to ask the question it is likely because you don't need the high end features available in the MS Office suite. Most people don't, but the bloat is there (and is obvious) whether you need these features or not.

This has been said by others as well, but from a cost per feature perspective, iWork hits the sweet spot for most users. Myself, I have both (I know, sounds stupid, but I need office for compatibility with work documents, and I use iWork for everything else).

Pages is simply nicer to use than word, and unless I need some of the esoteric features in word (or I need _precise_ compatibility) I do most of my work in pages.

Numbers can produce some really beautiful results, but in general is pretty lightweight from a feature perspective. Probably too light weight. Happily I almost never need to _produce_ complex spreadsheets, so I can easily use Numbers for everything I need it for. I have Excel for those hairy spreadsheets my boss is so fond of sending me.

Keynote blows away Powerpoint. I have never found a reason I would ever use Powerpoint instead of Keynote to produce a presentation. But then I've never liked Powerpoint, even when its the only option I have.

There is one other products you may also want to consider:

Look into Omnigraffle instead of Visio. Visio was a nice tool before Microsoft got their hands on it (early 90's? Can't exactly remember when). Now it's just awful.
 
Pages is simply nicer to use than word, and unless I need some of the esoteric features in word (or I need _precise_ compatibility) I do most of my work in pages.

If you need _precise_ compatibility then you have to use the same version of Office as the person receiving the document and that generally means the Windows version. I do have a copy of Office 2000 running under Windows on my Mac and that serves reasonably well when someone insists that I send a Word doc. It isn't as feature laden as the later versions but runs well enough and is compatible enough to be acceptable. I've shared docs from Office 2004 with Windows users and they can show subtle changes. More to the point, I've had docs from Windows users which looked bad on Office:mac too and it is difficult to convince them that they have done something wrong such as the time someone sent me a doc that was full of weird text because they had used the box that Word on Windows uses to substitute for a missing font. That font was present on my Mac so the doc looked like crap.

Anyway, as I said if I want to be really safe I send docs as PDF if they don't need to be edited and use the Windows version of Office when sharing docs that need editing. Office:mac is OK but is no guarantee of compatibility so in my book is barely better than iWork and loses on the interface stakes.
 
I decided to go with iWork.

For my needs, MSO and iWork's features are basically the same except for Keynote which most people here said that it blows PowerPoint away. My school district uses PCs so I could just save/upload my Keynotes from iWork to iWork.com and present them to my class from there to avoid any compatibility issues with MSO 2007.

Thanks for all your suggestions and opinions.

Also, does iWork.com use Flash Player to present the Keynotes or QuickTime? And is saving Keynotes to QuickTime format to present it on Windows reliable?
 
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