The only problem with this separation of working methods is that you cannot switch between them. If you create a word processing document because you want to focus on text content but later decide you want to lay it out as a booklet, you can't simply switch modes to get full access to the Page Layout mode's features. Instead, you need to create a new Page Layout document and then copy and paste your content into text boxes and rearrange or link them to flow your text. Choosing which mode to use could also be confusing to new users.

Beyond the new separation of tasks, Pages has gotten a few other useful new features. One of the ones I found the most exciting (mostly because I use the equivalent in Word almost constantly) is a Track Changes option. Anyone who collaborates using Word has probably used this feature even if they haven't always loved Microsoft's implementation of it.

Pages implements tracking changes better than Word because it offers a variety of ways to display changes, including a browser panel that is considerably easier to use than the views included with Word. Anyone who has tried to decipher a Word document in which more than two people have made changes will immediately notice less eyestrain and confusion when using this feature in Pages.

Even better, Pages can not only track changes in its own documents but seamlessly track changes in and export changes to Word documents as well -- properly identifying the author(s) of the changes, too. In fact, Pages '08 does a great job of working with Word, both when opening highly formatted Word documents and exporting them back Word. Even Page Layout mode documents filled with style and format options retain almost all, if not all, of their look after export.

As powerful as Pages is, longtime and heavy users of Word may find some features still not quite up to par. Word is more flexible at creating mail merges, for example: Pages can do mail merges but relies on contacts stored in the Mac OS X Address Book application or as vCard files. While Pages can create tables, it can't convert existing text to a table. And Pages can format text to look like an outline, but it can't make a functional collapsible outline the way Word can. If your work depends on any of those features (or similar specialized tools), you'll have to find workarounds or keep Word around.

Keynote

Keynote has always been a great presentation tool. Its array of stunning templates and transitions, easy access to content via the iLife media browser, and the range of visual effects and 3-D charts have always made it an attractive alternative to PowerPoint. In iWork '08, Apple found some great new features to add to Keynote's already impressive repertoire.

The first new feature is easy slide-show animations called Smart Builds. At first, I didn't see the point to these since Keynote can already cause items to appear on a slide in sequence, with great transitions. But what Smart Builds let you do is create an animated slide show within a slide. Simply choose an animation -- such as Spinning Cube or Turntable -- drop the pictures you want to use into the Drop Zone (which looks very similar to a Drop Zone in iDVD), and you have a great 3-D animation in which one image is replaced by the next, running within a slide while the rest of the slide's content remains visible. With a technique referred to as A-to-B animation, advanced users can even manipulate exactly how animations and related effects display and set options for specific images.

Another feature that ratchets up the already impressive graphics support is something called Instant Alpha (available in Pages and Numbers as well). Instant Alpha allows you to select and mask out backgrounds in any image in a slide. The process is similar to using the "magic wand" selection tool in Adobe Photoshop and similar graphics applications, although the operation is much more fluid and intuitive. The power of Instant Alpha isn't that it offers something new (using a graphics application, you can get the same effect, after all). The difference is that now you don't need to go to a graphics application to get it. You can do it right in Keynote with a very easy-to-use interface and without modifying the original image file. Note: This feature doesn't work on images included in a Smart Build.

The new tools for creating slides, however, aren't what impressed me the most about Keynote '08. That would have to be the ability to record a voice track for a presentation. This is a feature that takes Keynote from being useful for giving lectures in person to a tool for recording and presenting them to anyone, anywhere.