The core of Microsoft Word hasn’t changed all that much since 1997, but the interface has. The new version is a lot prettier. The only major upgrade I can think of is the new OOXML format, which MS has promised will be an Open Standard, but which no one is actually using.

The only significant upgrade is to Outlook, which is massively improved. But the free Mozilla Thunderbird (with the Lightning plugin) is more powerful still, though not as pretty. A post is forthcoming on this.

Finally, this is the ULTIMATE edition, which includes programs you probably don’t have in your 2003 edition. I edited the post above to provide two links to the list of programs. But, even here, the only ones that you might be interested in using are OneNote and PowerPoint. (Groove is ridiculous. You probably have no need of Access. Etc).

So I would say the upgrade from 2003 is not worth it, but for editions prior to 2003 it is. Personally, I only use MS Office for compatibility reasons—when someone sends me a .doc file that I have to modify and send back—and even then OpenOffice can usually do the trick (with PDF export). There are free solutions that can fill in any Office-2003 holes that might need filled, as I will describe in a forthcoming post.