There are quite a few alternatives. One of the most interesting is the suite of apps from Google. The great thing about Google Docs is that you can access it from any computer and that it's saved to the cloud. Just like almost everything from Google, using Google Docs is free, which is a welcome benefit since MS Office costs anywhere from $150 for the student edition to $500 for the professional version. The downside is that Google Docs doesn't have as many features as MS Office, especially if you're used to using Office day in day out.Open Office suite of programs. Just like Google Docs, they are free to download and use. Open Office is definitely the way to go if you want something to edit your documents when you're not online.
Just like many things in life, it all has to do with what you do with them that matters. For example, if you spend hours and hours working on spreadsheets and documents, then it might be worthwhile to get MS Office. If you're just a casual user, that enjoys using Google Docs, then you're pretty much settled. A lot of business have started using Google Docs, so it's by no means less effective. It just takes some getting used to. If you need Office at work or at school, you might be able to get them from the IT department for free. Also, some school pre-install a bunch of software on their students' laptops, so you might be able to get it for free as well.
[header image via Alan Joyce]