I love Google Docs - it's free, easy to use, allows collaboration, and, did I mention, it's free?
Google is very supportive of education and runs free training sessions for educators. There is also a lot of great resources for educators online. Here are a few of them.
Google Docs Blog - Beginners Getting Started Guides. - Great getting started guides for using Google Docs. The blog has a lot of great tips and resources.
Google Docs Help - Project Ideas for Teachers - ideas and samples of how to use Google Docs in the classroom. The Docs Help page is another great resource.
20 Interesting Ways to Use Google Docs in the Classroom - a Google Docs presentation for teachers about how to use Google Docs.
In addition to these, there are many more resources for Google Docs on the internet. If you would have a student use Microsoft Office, they can use Google Docs instead. This allows them to not have to purchase software and they can access their work from any internet connected computer.