Like everything else, it can read Word files. It's easier to do design intensive tasks such as newsletters and broadsheets, but is missing some more advanced word processor functions. It's kind of halfway between a word processor and a page design program. If you just need to be able to read existing MS documents and then are going to work on the Mac, I probably wouldn't bother buying MS Office, and certainly not until they come out with the native Intel version.
If you are regularly collaborating with Windows users, I'd use MS Office. While these products can all import and export in the old Word formats, you'll lose details. There's a native version, Neooffice, that doesn't require X. Open Office is free, and is roughly equivalent to MS Office. There are less expensive products, such as Nissus. MS Office for the Mac is a perfectly acceptable word processor. So I'd recommend that you decide what level of word processing you'll need on the Mac. Just about every word processor on the Mac can read Word documents, though some details of formatting may not be right.
