I used Word pretty much all through university, and two big things stick in my mind as to how well it worked: a 300 page group design project report which was written in individual parts by everybody and merged together by me, and my undergrad thesis which was about 80 page's worth.
The 300 page effort was massive, but Word performed flawlessly. I first gave everybody a template to work off (Styles for headings, figures, etc all set up, numbers, listings, etc) and taught them how to use it (please don't just bold crap for headings, select Style: Heading 1 instead). In the end we had about 24 reports which needed to be merged into one document. The merging was done without any problems: all the sections, subsections, figure numberings updated themselves perfectly. I then put in the Table of Contents, Table of Figures, etc automatically, and it all worked straight off the bat. Try doing THAT in Latex, or OpenOffice.
This includes lots and lots of pictures, graphs and results from Excel, footnote references, everything you'd expect to see in an academic report. I spent more time merging the documents together than ironing out problems with the numbering or formatting of the document. 9 people wrote the 24 reports between them, all on their own computers and in their own time; more than a few used to hate Word and were in the "Too 1337 for M$ Products" crew, but after seeing how well it worked they conceded that it would not have happened had we used Latex as they suggested in the beginning.My undergrad thesis was just as smooth an experience. Everything worked as advertised...styles made life easy, links worked, I spent more time thinking about how to write it and how I wanted it to look than actually getting it done.
In my experience a lot of the problems people have with MS products can be put down to PEBKAC.
