Yes OpenOffice.org is free but requires X11 and is not as nice looking as it is not OS X-native and doesn't have an aqua interface. However, it is free and is as powerful as Microsoft Office (and as compatible). Also, ThinkFree Office is something like £30 ($50) and maybe worth looking into.
I went for MS Office as I needed the ultimate compatibility and ease of use - and it's (only!!) £115 with student discount. I use Word, Excel and PowerPoint regularly for my course so it was worthwhile.
Apple has long been rumoured to release "iWorks" or the like - an MS Office competitor, so it may be worth waiting for. It'll cost though... Personally I would like to get Keynote, but I can't justify spending £60 (education) when I have PowerPoint...