I enjoy these apps but they're certainly not on the level of Office or even iWork for the Mac. I think it's a good start of where we should be going and they've done well in creating a consistent UI across the iPad and iPhone.
I recently had to write a one-page letter on my iPhone and email it to somebody to print out, sign and hand to a third-party. It wasn't by choice, it was just an urgent request and I had nothing else with me.
Surprisingly, it wasn't nearly as painful as I expected. It didn't take me long to write the letter (the default templates helped a lot), making edits was fairly easy and I had no trouble being able to read over what I had written.
So for small edits to existing files and quick docs it's usable, though clearly not as good an experience as using the same suite on an iPad.
Good point. Still, this relies heavily on the use of palettes, which we haven't seen in Metro. Maybe they'll have some UI elements like that in Metro, I don't know.