Office is and it isn't worth the money.
For most tasks you can get by without it, but any time you need to interoperate with a peecee user you'll NEED to have it. Pages (from iWork) is a good program for importing and exporting Word documents, but there are still issues with it and it's not ready for the big time, but by version 2 it might. Excel on the other hand is a little harder to replace, I've yet to find another decent spreadsheet program. Basically, if you're going to do your own thing on your own machine and not need to deal with colaborative work, then you can get by without Office, but thats a big if.
On the other hand, Office 2004 is by FAR the best version of Office that I've ever used (on either platform). That being said, I havn't upgraded my personal machines from v.X yet, because the price is just insanely high for the amount of use that I get out of it. Look into getting a "cheap" copy somewhere, the full retail price just doesn't feel worth it. Check with your school, mine (University of Michigan) used to have a deal where you could get a two computer license for $30-40.