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My take - if you are working independantly, iWork is very well done and inexpensive. If you need to do a lot of exchanging documents with others using Office on either the Mac or Windows, then Office 2011 makes a lot of sense.

This is the advice you should listen to.

Use Office if you are going to be sending work for marking/etc. Its better to have no compatibility issues than some (e.g. formatting, fonts, etc can cause problems).
 
OpenOffice.org

I've always used the Windows version of it's great and free.
the only problem is that it can only open docX, xlsX, pptX formats, but once you change something in them it will save them as normal doc, xlx en ppt's.
So you lose some of the "extentionX" formatting.

The worst thing is again that "extensionX" isn't a standard and not supported.
Today at companies the official standard is still "normal extension". Employees should save any type of document under the normal extension and not "extensionX", unfortunally the "extensionX" version stands standard as the save to format.

If word and powerpoint are your main formats, OOO writer and OOO Impress will do the trick and is free. If it's docx and pptx, then you can only go to MS Office 11...or you bootcamp Windows and use Office 2007 and 2010 if you already have them.

I use iWork (and OpenOffice.Org) on my iMac because I have also got iWork on my iPad and iPhone.
 
Small update of my previous post:

I replaced OpenOffice.Org with LibreOffice 3.4.4 (rock solid stable version), it's a fork of OOO, which also supports the formatX standard (MS Open XML) of Microsoft.

Works like a charm: texteditor, spreadsheet, presentation, WYSIWYG editor, and database for the full price of $/€0.00
 
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