GraphicConverter is great for replacing the paint module in AppleWorks. I switched to GC long before AppleWorks was even last updated.
There are a number of vector graphic apps around. Unfortunately, I can't find a list on iWork Tips & Tricks, but you might take a look through the various topics.
A search for vector on MacUpdate came up with these results. I did buy Sketch & DrawIt some time ago based on a recommendation by others, but haven't really used them.
Have you had a look at 'Grapher' which is in your utilities folder. You input functions as in y = x^2 and it plots the function for you. You can use it as an equation editor too as it will display the function in its proper format eg in the above example no ' ^ ' and the 2 is displayed in super script and you can cut and paste this onto the graph (see below) or into another document altogether. Your plot can be saved in a number of formats eg pdf, jpeg, etc for display as is or you can incorporate them into a powerpoint / keynote / open office presentation and add further text or graphics.
The example below is a simple graph with the function pasted into it and exported as a jpeg file.
I'm suggesting this different approach as you my well find that your equation editor also stops working when you upgrade.
Try out Pages in the iWork suite. To get the formulas you can use MathType (seperate application) which can be intergrated in Pages. There are shapes and lines to use in Pages and you can add other graphic if you like.
http://www.apple.com/iwork/download-trial/ You might need to do Software updates.