Microsoft Office is not just overpriced--for most users, it's overkill. That's why I've been increasingly recommending IBM Lotus Symphony, a well-rounded office suite that just so happens to be free. It's built on open-source favorite OpenOffice, but sports a sleeker, friendlier interface.
Symphony (available for Windows and Linux) offers word processing, spreadsheets, and presentations. It supports Office 2003 file formats as well as OpenDocument and others. And it relies on an ingenious tabbed interface that keeps all your documents under the same roof--no switching between apps like with most other suites. I particularly like the sidebars, which keep frequently used settings close at hand while reducing toolbar clutter.
What's the bad news? Symphony is still in beta, and it has the bugs to prove it. It's kind of slow, too. But you can't argue with the price. Why spend upwards of $400 on Office when you can get most of the same features (and a less intimidating interface) for nothing?