Word is okay for some purposes, but it tends to crash long documents (such as theses or books) and if you split it up into a number of different files then you have difficulties with generating consistent headings / page numbers / tables of contents etc. I had significant difficulty with my Masters Thesis (a mere 30,000 words) because it wanted to move text box diagrams onto a new page where it was JUST OBVIOUS that there was room for it on the bottom of the previous page, and where it either repeated lines from the bottom of one page at the top of the next or left a couple of lines out altogether. IF ONLY what you saw on the screen was what you got in the PDF or from the printer.

But even if what you saw on the screen was what you got in the PDF or from the printer there are still a number of advanced typographical features that aren't available in Word. For example:

http://nitens.org/taraborelli/latex

The differences might not seem particularly apparent if you aren't used to noticing them, but they do become rather more apparent when looking at a whole page of text that has been generated. Professional typesetters would never dream of using Word to typeset a book. They would use a professional typesetting program to get ligatures and kerning and small caps and spacing just right. TeX isn't really a professional typesetting program, but it provides the best typesetting output of any freeware for non-professionals.