Office for Mac was the first program I bought for my Powerbook. I'm a high school student, and I need the compatibility, so it's obviously an essential program for me. Nothing yet does compare to Excel, and I find Word easier to use for simple essays and such than Pages (from iWork). Keynote (also from iWork) presentations do look much nicer than Power Point presentations, but when my teachers need to play the presentation on their computer, Power Point is the only choice. It's also needed if they send presentations to me.
As some other people have mentioned, Office 2004 for Mac is actually nicer than the Windows version. It has more features, and a much nicer user interface (in my opinion).
However, I'm not really sure regular Office is worth it. $400 is just too much in my opinion for the average user. But at the student and teacher price, it's definitely worth it, especially now with the $50 mail in rebate. Once you use Office, you'll probably never go back to AppleWorks.
Oh, and on my PB, I've found Office 2004 to be very stable. I don't think it's ever crashed. So it's not like the typical Microsoft product.
There's also a whole website devoted to the Mac version of Office. Just go to
http://www.mactopia.com
If you do decide to purchase it, there's a bunch of cool and useful templates to download there.