Pages, instead of a “word processing” application, could more appropriately be called a “page layout” application. A very simplistic, very basic, very user-friendly page layout app. It depends on drag and drop, and the templates included make it a perfect program for doing something a Windows user would typically turn to Microsoft Publisher for.
It sounds like a useful application to have available, but it won’t be going in my toolbox. I don’t create any one-off layout-heavy documents that AppleWorks or OmniGraffle can’t handle. For everything else, I need better editing (BBEdit) and better support for structure and exporting (FrameMaker+SGML, ReST, LaTeX).