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If you want/need more formatting choices and some pre-defined document templates you don't have to create from scratch, look at Pages from the Mac App Store, for about $20.
Pages has most of the features of Microsoft Word for Windows, but it does take a while to adjust to a completely different user interface.
You can view the Pages '09 manual (the current version) before you make a purchase decision: http://support.apple.com/manuals/#pages
There are also free 'Office-compatible' suites available for Mac OS X such as NeoOffice.org and OpenOffice.org.