We suggest taking a look at Carolina Road's Jarte, a free, tabbed-based, Word-compatible word processor built upon WordPad. It's fast and reliable, like WordPad, but it adds some features, such as single-click bookmarking, mouse scroll wheel cut-and-paste capability, and dictionary and thesaurus reference tools. Jarte is available in installed and portable versions; there's also a paid upgrade (still less than Word, though). The latest version of Jarte is compatible with Windows 8; we tried it in Windows 7.
Jarte's installer let us choose whether to install some components, such as dictionary and spell checker tools for French, Spanish, Italian, and other languages. As soon as Jarte opened, we could see it's not simply WordPad with a stone wall background theme: It's organized very differently, with a simplified, button-based interface that looks nothing like WordPad's Office-based style. But Jarte offers a lot of options for changing its look, including Compact, Minimal, and Classic Layouts; button labels; tool tips; and a View menu full of Line Guides, Tool Panels, Rulers, Quick Bars, and other display options we could enable with check boxes for a totally customized look. We could also change the background theme and even get more styles online. There's something for everyone, and the NotePad-like Minimal Interface for the hard-to-please.
The acid test: We actually typed "the acid test" in Jarte and saved it as a Word Document (our other choices were rich text and plain text). Our saved document looked like any Word-created file, and it opened normally in Word with a click: We didn't even have to specify a program. Jarte has the format, insert, highlighting, and word count features we expect, and its editing tools didn't let us down, either. We especially like the Format Brush tool. An excellent help file is available, too. The new word on free Word alternatives is "Jarte."