I have been using iWork '08 for a year now and absolutely loving it. I have Microsoft Office for Mac and as I never learned to use it in work (I have never worked in an office) I never got much beyond very basic documents, and always really struggled when adding and images, or even borders!
Then along came iWork...Brilliant! It made everything so easy and beautiful, as only Apple products can. I was producing documents, posters, newsletters and presentations (all for my small business) like it was going out of fashion.
Then came iWork '09. I saw the video's and bought it primarily because of the upgrades in 'Keynote', which are excellent. They have really tightened everything else up as well though, and 'Pages' is much more of a word processing app now, and although I don't use it to that much depth, 'Numbers' now has so much more options and depth as to warrant a full switch from MS Office to iWork, certainly from an average user standpoint.
Since using iWork, my work rate and quality of things produced has increased dramatically, and iWork '09 has really smoothed out a lot of the edges and added some really stunning things to Keynote. Overall, however, the upgrade is only there for those avid fans as there are not enough changes or improvements really to warrant a jump from '08 to '09.