Office suites
The most obvious choice for word processor, spreadsheet and presentation software is the free OpenOffice. Currently in version 1.0.3.1, this office productivity suite has come a long way since its early days. It now reads and writes Microsoft Word files (several different versions, from 95 onwards) seamlessly, while its native format is XML -- as Microsoft Office 2003's will be.
There are plenty of niggles about OpenOffice's word processor: it can be slow, some features don't work perfectly, and it isn't quite as slick as Word. On the other hand, it has a few conveniences of its own, and it exchanges files seamlessly. The most important functions are there, and are entirely usable.
Similarly, although you won't find every Microsoft-equivalent feature in the spreadsheet and presentation modules, they do work admirably well -- and, of course, very few users exhaust the functionality of the applications they buy. OpenOffice also includes drawing, maths and Web editing modules, making it a good array of productivity software. Once it's installed on your low-cost system you might find that there's no compelling reason to replace it.
