iWork applications and apps are paid but dirt cheap, cloud sync is free for first 5GB storage. Pages handles MS Word formats well, even full "track changes" interop from iPad, so you can round trip office docs from a train.
Does it? The people that I've known to try this have all complained to me about problems. Not sure if this is a compatibility issue or Pages itself (and not sure if it's just my small sample of friends).
Long time Pages user - It does handle Word reasonably well, just as Numbers handles Excel, and Keynote handles PPT. But as with most import/export functionality it has quirks so that you cannot use it exclusively. It is not useless, but not perfect. Depends on the document.
I'd say Keynote<-->PPT is the best of the bunch, followed by Pages<->Word. VBA Excel macros are hard to port.
