Okay, Taper. Here is your chance to sell me on Linux. Why would a dude like me (who is somewhat tech savvy in general, but by no means a computer whiz) ever want to bother with Linux?
Granted, there is almost no chance that I will download Linux, but you have my attention at least.
If you aren't ready to move to Linux, nothing we say will convince you otherwise.
MS Windows is still the right OS for some things. Gaming in particular. This is because of the near-total lock-in that Windows has with game developers. There are also a few other specialty niches that will remain Windows-only for quite some time. Certain medical and legal fields come to mind, for instance. This is because nobody has yet written the necessary Free/Libre Open Source Software for those fields. Also, for large businesses, MS Office is still the choice. I will be the first to admit that doing things the MS-way is deeply ingrained in Corporate America. Plus, in some ways OpenOffice doesn't scale quite as well as MS-Office. (Try working with spreadsheets that have 60000+ rows of data. Despite everything I dislike about MS, OO just doesn't handle those as well as Excel.)
Still, anyone who wants to check out the scene can easily download a live-CD, and play with it without ever touching the Windows files on their system. PCLinuxOS 2009.1 was just released, and is, IMHO, a blockbuster. Stable, easy to use, KDE-based, it is perfect for the new Linux user. Ubuntu and its derivatives are also quite good. Knoppix is excellent, as are Mandriva and Mepis.
Despite the "feel good" marketing MS uses, they are not really interested in making the customer happy. They are out to make $$. That is MS' sole reason for existence. They (and "they" means everyone from MS execs down through their distributors, and even to the "Geek Squad" kiddies) will deliberately "lie" to you to make their money. They will sell you an inferior product, and then force you to purchase an "upgrade" just so you can do what you originally bought the product for. They tout how much improved their security is, and point to their silly UAC as proof, meanwhile, they knowingly leave security holes big enough to drive a Mac truck through. They pushed through the "Trusted Computing" idea, which boils down to "if it isn't running on a verified Windows system, it won't be allowed to run". This is to be implemented via hardware, and, in fact, much of that hardware has already been slipped onto some motherboards - the functionality is just turned off, for now.
Linux is based on the idea of Freedom. You bought the computer; you should be able to use it as you see fit. If something doesn't work the way you want, you should be able to change it so it does. And you should be able to let other people make use of the changes you made. Linux, being originally a "Unix work-alike", was designed from the ground up as a multi-user, network-safe system. Along with it's cousin, BSD,and Uncle Unix, it is the backbone of the Internet. Even MS still uses *nix servers for their mission critical network servers (although they have tried to obfuscate that fact since it was discovered).
There are no known viable Linux viruses to be found in the wild. There
are other types of malware, like trojans and worms, but you have to be doing things in a very insecure manner to get bitten by one of those. Unlike Windows, where "insecure" is the default setting, and you have to make it secure, Linux, in most distributions, is by default "secure", and can be easily tweaked to "very secure". You have to deliberately take actions to make it less secure.
(I'll step down from my soapbox now.

)
2009 is the year of the Linux desktop
My Year of the Linux Desktop was 2003.
What programs do you use for your word processing / spreadsheeting? How do you deal with any compatibility issues with Microsoft Office?
OpenOffice is the most common MSOffice-compatible suite used. It can, as has been pointed out, read/write pretty much any version of MS Office files. Admittedly, if you do a LOT of fancy formatting and such, you will find some divergence creeping in. The KOffice suite is making strides in that direction, as well. Also, abiword is able to read/write .doc formats. I'm not sure if it has .docx, yet, though.