If you're going to be using the files that you create only for your use, and not importing a whole lot of files from others, Appleworks will be sufficient.
However, if you've got to collaborate with lots of people with Windoze computers, sharing files, and altering them, you'll want to spring for Office.
Office really works, and is still the best office suite out there for the Mac. It's too bad Apple didn't release a spreadsheet app along with the new Word competitor (the name simply escapes me right now.)
If you get Office v.X for cheap, it'll work great. Just remember to quit the apps when you're done with them - a very non-mac like process. It eats processor cycles, even when idle. I'm told that Office 2004 doesn't have this problem.