Clearly, all three can be very good solutions for many users and offer a similar set of basic features. However, they offer striking differences when it comes to functionality, interface, and the situations theyre best suited for. Understanding your needs as a user is probably the biggest key to picking the best solution.
Word Processing vs. Layout
Of all the Office applications, Word is probably the most commonly and broadly used, making it a good place to begin a comparison. Word, iWorks Pages, and Google Docs all solidly offer the basic features of a word processor (text editing, basic formatting, spell/grammar checking). For the most common of writing and editing tasks, all three choices are effective.
Where feature sets tend to be different is when it comes to more advanced formatting and layout. Google Docs offers very limited formatting options as a whole: essentially just a handful of fonts, limited text justification and list options, basic color choices, and the typical bold/italics/underline options. Both Word and Pages allow you to take advantages of any fonts on your Mac, create complex tables and columns, list formats, outline modes, and other styling options giving them a major leg up if you want to customize your documents in any real way.
When it comes to layout (and to a lesser extent styling), Pages has historically had a big leg up on Word. Pages has always combined word processing with layout functions more typically found in desktop publishing software. Features like flowing text between different sections of a page or document and advanced image manipulation (like layering and masking images, floating text and visual elements around each other, and visual effects like drop shadows and reflections) have not traditionally been easily available to Word users.
In Word 2008, Microsoft did introduce a publishing layout mode (as well as a new Notebook layout view) that offers many of these features. However, documents must be created in that mode to take full advantage of those features. While Apple does make a distinction in its Pages templates between word processing and layout projects, Pages 09 allows users to simply drag and drop media elements or create text boxes in any project meaning there is no real separation between the two functions. Apple also provides a wider range of layout templates that are somewhat more polished looking than those offered in Word.
Setting aside layout features, the two applications are largely similar in functionality. Both offer outline modes, track changes and commenting features, a wide range of test styling options, and the ability to add tables, charts, and columns with relative ease. Pages now offers support for mail merges from Numbers spreadsheets and Mac OS Xs Address Book, correcting a major deficiency for many users. One area that Pages does excel at is integrating with Apples iLife media browser, which can make it somewhat easier to use photos (as well as theoretically music and video). For users that rely on Apples solutions for storing contacts and media, these can be big pluses for Pages.
In many ways, the choice between the two really comes down to a matter of user interface preference. Both can get the jobs done that most users want to accomplish. While Pages may be easier for new users and people looking to work easily and quickly with media and layout capabilities, it will also feel a bit alien (at least at first) to many long-time Office users who are used to Words interface.
Whats the Focus of Your Spreadsheets?
The first time I used Numbers in iWork 08, I remember being absolutely floored because it was the first time I ever felt excited about anything having to do with spreadsheets.
A huge part of that feeling was because Numbers approaches spreadsheets very differently than Excel does. Numbers includes the requisite grid of rows and columns, but that familiar grid isnt the focus of an entire document.
Numbers approaches information more like a document that happens to contain spreadsheet data, relying on sheets that can be laid out in many of the same ways as a Pages document. Tables (the traditional spreadsheet grid) are placed on one or more sheets in a document along with supporting text, images and other media, and charts that are based on the contents of the data in one or more tables. The result is a tool that focuses less on the spreadsheet itself and more on helping to visually organize and digest the information that can be gleaned from the data in the spreadsheet.
This is a great approach for novice spreadsheet users and those people who tend to avoid Excel because the application seems too complex or tedious as a way of interacting with information. Numbers opens the door for the average consumer, small business user, or young student to find ways to work with spreadsheets that they might otherwise avoid or not even thing about. And Apple provides a number of excellent templates for projects ranging from planning a dinner party to tracking an infants health checkups to get anyone started.