It just amazes me that Microsoft continues to not get it. For a company with so many resources, they've been fighting a losing battle for years. Thankfully for them, Microsoft Office is such an entrenched part of the working world that it's almost impossible for it to be displaced. But, free offerings, now including iWork, will continue to encroach on their territory. If they don't play their cards right, their Office monopoly will be over sooner rather than later.
Oh for goodness sake, iWorks is irrelevant, free or not. You might as well say crayons and a ruler given out for free is going to displace AutoCad!