A colleague asked me about what I use for word processing on the Mac. I started to respond, then realized it could be a quick post.
Briefly, I use Nisus Writer Express (NWE). It uses .RTF or .DOC as its native file format; that one absolute requirement of mine wiped out all the alternatives except Microsoft Word -- and I don't like Word. NWE is Cocoa native and works well with OS X services, it does the basics well. It has a great UI and has been fast and reliable in my experience. My wife uses it without any problems.
I haven't written any very long documents with it however.
Nisus has recently released Pro version of NWE. I'll eventually upgrade to, but it's a low priority for me. If the Pro version had a true outliner I'd probably have done it by now.
Nisus does a fair job importing simple Word documents, but even the Pro version can't import a Word Table of Contents. That's disappointing, since I use Word TOCs quite a bit. Nisus is, however, a much more agreeable word processing tool than Word. For one thing, the Styles actually make sense.
OS X 10.4 ships with TextEdit which uses a "package" version of RTF, but it's too feature sparse. The version in 10.5 is said to be closer to a true word processor and it has support for Microsoft's XML and the ODF file formats (inherited from 10.5). I've no experience with 10.5 though -- and I won't for months to come.
Pages, part of Apple's iWork suite, uses a proprietary Apple XML file format. That rules it out for me.
The only remaining alternatives are Word for Mac or Word 2003/2007 running in a Win2K or XP VM (VMWare or Parallels).
If all my machines were MacTel and I didn't use Nisus, I'd probably run Word 2003 in my Win2K VM. The tyranny of the .DOC file format should not be underestimated.
Update 2/28/2008: I've unfortunately become aware of Nisus Achilles heel. It can't compress embedded images. So a 3 MB JPEG embedded in a Nisus document produces a 20MB file -- Nisus stores the image as an uncompressed bitmap. Word compresses embedded images, and allows them to be clipped. I'm curious to see what Pages does.
Update 10/13/2008: When I moved my machines to 10.5 I also upgraded to Nisus Writer Pro. I haven't tested to see if it still has the bitmap problem, but it does have other issues. In a document where I used huge fonts (visually impaired user) Nisus was slow to redraw some pages. An image positioned using Nisus Writer Pro vanished when the document was opened in an older version of Nisus Writer Express. I have also become aware of how much I miss a drawing tool layer. AppleWorks drawing tools were particularly good, they really played to the strengths of AppleWork's compound document model. I might take another look at iWork, though that is a return to proprietary document formats. I do wish the rest of the world cared more about document longevity!