iWork 09 is Apple's competitor to Microsoft Office. It includes word processing, spreadsheet, and slide presentation applications in one collection of integrated tools. iWork 09 is compatible with Office in that files from one can be opened and updated with the other, but there's a difference in complexity between the two products. iWork 09 is much simpler system to than Office, which may be an advantage for some and a drawback for others.
All the component parts of iWork 09 have been designed to be simple to use (or at least simpler than Office). There are a number of nice features that users will like and that are easier to access and deploy than the equivalent in Office, but there are also some more-advanced features that are missing. Pages is the word-processing component and it provides enough power to satisfy most people, even to the point of being able to provide publication-ready content. Keynote is the presentation tool, with a lot of templates, transitions, and effects available. Numbers is the spreadsheet tool, with many one-click features for charts and tables. There is an iOS version of iWork 09, so you can use it on any Apple device.
iWork 09 is a mixed bag for us. The latest version is no longer new, and there has been no sign of updates. With the still-growing popularity of Office for the Mac, the main draw of iWork 09 is its lower price (although that advantage has disappeared almost completely lately due to aggressive marketing) and simpler interfaces that Mac users will be familiar with. Despite continued rumors of iWork's demise, Apple does seem to be continuing to offer it.
All in all, whether Office or iWork 09 is the right tool for you depends on whether you want fast food or a restaurant meal.