The big trick Microsoft and the big companies play nowadays is to either pre-install a 'trial' or '30/60 day' version of Office 2007 (and now the just released Office 2010) software to tie you in and make you buy the expensive software. They try and lessen the blow by offering £70-£150 range software for the 'Home' and 'Student' users, but it is still money.
Here's five options, with full reviews for equivalent software you can download and use for free. The article has links to all 5 sites. Between them you can get almost everything done that any person can need, save it in any format and strike a blow for free, open-source software. I believe you can buy them on CD too for less than £10 usually if you don't want to download, but please check.
I have used Open Office regularly for many things..
First-time poster of a deal, so please be gentle!