I can't really answer your main question on Windows 7 and Snow Leopard since I haven't been keeping up with the rumors and blogs of the upcoming programs. I hear Windows 7 though is supposed to return PCs to sanity like with XP, which some people actually "downgraded" to on their new PC purchases to avoid Vista.
I used to have a Compaq on XP and I loved it. It didn't have all those cool features like Apple's widgets, but it was stable and straightforward. I currently use a previous generation macbook pro on Leopard and I love the program to death. On my 2GB of ram the computer is fast and can easily multitask.
What I can advise you on though is your secondary question of Mic. Office or iWork software. I have both since I originally purchased the iWork since it was much cheaper than Mic. Office and I was easily able to learn of all the features and shortcuts and became fairly productive with it. I also like that Pages can be used not only as a Word document but a sort of layout software like Illustrator to a small degree with rulers, guides, and ability to make objects "float" causing them to be easily manageable around the page borders.
The only thing about iWork is its compatibility. It has gotten much better over time and you can easily export a document into a Word format, but no matter how comparative it is, as long as Pages uses formatting tools that Word doesn't have like the floating capability I mentioned, your documents will get screwed up. I learned to either keep my documents super basic that I know Word will recognize, or just turn everything into PDF formats so PCs can read them.
Besides the extra care in translating Pages to Word formatting, I would highly recommend iWork. It is fairly easy to use, even coming from a PC background, and with added features, you will get an entire design suite rather than just strictly a Word processing program.
P.S. even after loading Office on, I still use Pages for personal documents and note-taking. I just use Office when I know I will have to send it to a PC like my Resume for one, or for an Excel file.