I like iWork but need Office
I tried to use iWork and I do like it. It isn't that hard to export things to office format. Though sometimes you will lose some formatting. However most colleges recommend that you get office and since you are likely going to be sharing and e-mailing documents that is what I would recommend. If you get Office 2008 Student version you also get three licenses with it. So that is enough for both you and your wife.
I tried to use iWork and I do like it. It isn't that hard to export things to office format. Though sometimes you will lose some formatting. However most colleges recommend that you get office and since you are likely going to be sharing and e-mailing documents that is what I would recommend. If you get Office 2008 Student version you also get three licenses with it. So that is enough for both you and your wife.