Word has never been a very good page layout tool, even for basic designs, although this improved a little in Word 2008 with the Publishing Layout View. This allowed text and images to be arranged on a page in a more flexible, freeform way than in Word's other modes. When using this View, clicking the new Dynamic Reordering button in the Home Ribbon tab presents all the graphical and text elements of your document in a 3D view. This 3D view looks gimmicky at first, but it makes it much easier to reorder complex, layered graphics and text using a simple and quick drag and drop.
Another handy option is the ability to edit images within Word using the Format Picture Ribbon tab. It's no rival to Photoshop, but for simple, common editing tasks such as cropping, adjusting brightness or adding a border, it's very convenient.
Visual Basic for Applications (VBA) scripting was missing from Office 2008. Although not quite as critical for Word users as it is for Excel users, it still meant that macros in Word documents from Windows users wouldn't work. It also meant that developers of Word add-ons which depended on VBA to work, such as the popular EndNote academic citation program, had to develop workarounds. VBA has returned in Word 2011, which will please cross-platform macro users, but the current version of EndNote is incompatible. Users will therefore have to stick to Word 2008 and wait for a compatibility update or use Word 2011 and do without EndNote.
One of the recent Office alternatives to have emerged recently is the free Google Docs. Although not as sophisticated and fully-featured as Office, it has the advantage of being free and usable from almost any Web-connected computer without installing any extra software. Perhaps most importantly, working with multiple people on the same document is seamlessly easy in Google Docs.