Beginning with version 1.2 of Microsoft Word for iPad, you can now create and edit documents for FREE: all you need to do is sign in with a free Microsoft account.
Additionally, the update provides the following improvements:
• Dropbox support: open, edit, and save documents from Dropbox.
• Universal app: Word now also runs beautifully on your iPhone and iPod touch, and is designed especially for a smaller screen.
• Reflow view: on your phone, choose between the real document layout or an easy-to-read layout.
• Chart elements: customize charts by adding or removing chart elements such as titles, legends, axis titles and more.