No app on the iPad is a 100% replacement for Office; but as long as you don't need every bell and whistle that Office supplies there are several that will do an ecellent job.
The iWorks suite (Pages, Numbers, and Keynote) will create some very beautiful documents on the iPad, and have enough features to keep most people happy. They can export and import to MS Office. The compatibility is pretty good for one time transferees, but tends to breaks down if you keep moving the document back and forth; especially if it is complicated.
Other suites offer better MS Office compatibility, but vary in their ease of use and creative tools. The most popular are QuickOffice, Documents to Go, and Office HD. All of them have their strengths, and pretty much all of them make it easier to move documents back and forth between MS Office. Mostly they are also cheaper than buying all three iWorks apps.
Search for each of them here, on Google, the App Store. There are a couple of side-by-side reviews on the forum, but they are pretty long in the tooth, and all of the apps (including iWorks) have been significantly updated since.