Another option is Apple 'Pages'. It will accept .doc and .docx MS Word documents and you can edit them and export them in .doc or .pdf format. You can find a summary of its capabilities from the Apple Help Pages
http://help.apple.com/iwork/1.3/mobile/interface/index.html#tan724868a9
'Pages', like most (all?) the iPad Word-compatible programs can struggle with really complex formatting, but I've been using it for the past couple of months to write engineering documents and it copes OK.
It handles styles, images, tables, multiple columns, fonts, colours, background images etc etc without any problems.
There are some restrictions and some workarounds (i.e. it can display sub- and superscripts as well as footnotes, but you cannot edit them directly. However, there are a number of easy (if ugly) workrounds.) The range of fonts is not as extensive as MS Word, too. You can import/export documents either via email attachments or via 'cloud' servers, such as the Apple MobileMe iDisk.
Tim
Scotland