Apple Pages '08
When asked about how previous versions of Apple Pages compared with Word, I would often say that it was more like a combination of Word and Publisher - a hybrid word processor and layout tool. This was one of the things that you either loved or hated about the program. One of the best things Apple did with this new release of Apple iWork '08 was to give Apple Pages '08 two distinct modes: one for word processing and one for layout, with separate templates for each mode.
Apple iWork '08's separation of these features makes it much easier to use Apple Pages '08 for straight word processing. You can open a template and just start typing without worrying about placement (either on a single page or multiple pages), but you still have the option of placing graphics and manipulating text boxes if you want. If you really want to lay out a brochure or newsletter, however, where control of text positioning and flow between specific text boxes across multiple pages is critical, Page Layout mode is a better choice. You can create any layout in Word Processing mode that you can make in Page Layout mode - it's just clumsier.
Page Layout mode in fact gives consumers much of the capability of professional tools like Adobe InDesign and QuarkXPress at a fraction of their cost. It doesn't offer the final printing and prepress options or the typographic control of a pro tool, but those aren't things needed by home users or even many small businesses. And for those who do or will need professional tools, Apple Pages '08 makes a good steppingstone because it relies on the same basic methods as the more expensive applications. Apple iWork '08's version of Pages doesn't have more layout features than Apple Pages '06 had, but some have been made easier to use, and separating them from the bare writing tools makes them seem more distinct and professional.
The only problem with this separation of working methods is that you cannot switch between them. If you create a word processing document because you want to focus on text content but later decide you want to lay it out as a booklet, you can't simply switch modes to get full access to the Page Layout mode's features. Instead, you need to create a new Page Layout document and then copy and paste your content into text boxes and rearrange or link them to flow your text. Choosing which mode to use could also be confusing to new users of Apple iWork '08.
Beyond the new separation of tasks, Apple Pages '08 has gotten a few other useful new features in its Apple iWork '08 rendition. One of the ones I found the most exciting (mostly because I use the equivalent in Word almost constantly) is a Track Changes option. Anyone who collaborates using Word has probably used this feature even if they haven't always loved Microsoft's implementation of it.
Apple iWork '08's Apple Pages '08 implements tracking changes better than Word because it offers a variety of ways to display changes, including a browser panel that is considerably easier to use than the views included with Word. Anyone who has tried to decipher a Word document in which more than two people have made changes will immediately notice less eyestrain and confusion when using this feature in Apple Pages '08.
Even better, Apple iWork '08's Apple Pages '08 can not only track changes in its own documents but seamlessly track changes in and export changes to Word documents as well - properly identifying the author(s) of the changes, too. In fact, Apple Pages '08 does a great job of working with Word, both when opening highly formatted Word documents and exporting them back Word. Even Page Layout mode documents filled with style and format options retain almost all, if not all, of their look after export.
As powerful as Apple iWork '08's Apple Pages '08 is, longtime and heavy users of Word may find some features still not quite up to par. Word is more flexible at creating mail merges, for example: Apple Pages '08 can do mail merges but relies on contacts stored in the Mac OS X Address Book application or as vCard files. While Apple Pages '08 can create tables, it can't convert existing text to a table. And Apple Pages '08 can format text to look like an outline, but it can't make a functional collapsible outline the way Word can. If your work depends on any of those features (or similar specialised tools), you'll have to find workarounds or keep Word around.