For the love of Pete, do NOT get iWork if you're looking for a word processor. Despite what the Apple salespeople may tell you, Pages is NOT a word processor, it's a page layout program. Yes you can do word processing in it, but I wouldn't recommend it. If you just need basic word processing, text edit does a decent job. If you need fancier functions and most importantly Word compatibility, then just get Office. If you're not in a rush, wait for the next version if you have an intel Mac.
Despite what some people will tell you, Pages is a word processor.
Word, and maybe even Pages, is huge overkill for most users, and especially for someone who just wants to write a few letters. TextEdit might even do the job, provided that you aren't concerned with niceties such as headers and footers, page numbers, and paragraph styles.