AppleWorks is the way to go...
AppleWorks is great at translating simple Word and Excel documents. However, Excel formatting is a bit spotty, and while Word fonts and most formatting are not a problem, any fancy Word features (like tracking changes) won't translate.
And of course, Macros won't work... but that may not be a bad thing!
I personally love AppleWorks... it's fast, stable, and very capable. The drawing and painting features blow Word away for making good looking documents, and the program in general just stays out of your way. That is, like OS X vs. Windows in general, the program backs off and doesn't try to "fix" formatting or something as annoying as "Clippy" on the screen. However, I still prefer Excel over the AppleWorks spreadsheet, but that's probably because I actually make use of some of the fancy features of that program.
If you do go the AppleWorks route, remember to get the most recent updates from the Apple website... they improve Word and Excel compatability with every release.
By the way, I also use OpenOffice on occassion, mostly just for the geeky fun of it. It is very slow, however, and it really is just a clone of MS Office. Unfortunately, it reminds me of Office 97 (for PC), so I'd rather use MS Office than OpenOffice until the pretty Aqua version comes out.