The biggest problem with most people here is you're all stuck in this either/or mindset. Simplicity overrides complexity. If you can't learn it in 5 seconds, it's not worth learning at all.
The way I see it, if you want to bang out a nice looking document quickly, you'll use Pages. If you want granular control over every single thing in a complex document, you'll use Word. Both have their place depending on what you want to do.
The other thing I think is interesting is that it seems to me that word processing isn't a functionality that has a lot of innovation left. Microsoft would have you believe otherwise, but if there is additional functionality that people can and would use if it were developed, just how big is that market?
I'd love to see some studies of usage of Word comparing the amount of functionality the vast majority of people actually use on a day to day basis - I contend it's not much more than is already available in products like TextEdit for most everyone's word processing requirements, certainly Pages covers it. I think Word is overkill for the vast majority of users.
This is I'm sure a big fear of Microsoft's, because if people and companies start to look at this, they'll quickly realise that it's possible to save money by moving to simpler tools (or suites like OpenOffice?) to get the job done and come up with workflows that allow people to view and edit each others documents regardless the original products which created them.