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sky - all extensions are the same. .doc, .xls, you can change to other formats.
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I'm quite aware that OpenOffice can attempt to open most of MS Office's files, what I am concerned about is the 100% functionality. Does OpenOffice support features like 'track changes', styles, objects (like equation editor), all of the reference features, etc. etc? Does OpenOffice's spreadsheet support VBA, macros, and all of Excel's built-in functions? Can you guarantee me that if you get a MS file, then save it in OpenOffice and send it back out to your group, that absolutely no data or functionality was lost? Are all the changes and comments still going to be there in the Word document? Is the VBA code still going to be in the Excel file? [Hint: I don't actually want to you enumerate every feature I listed, I want a simply yes or no answer] Regardless of what you say, as others have said in addition to what I have, MS Office is the standard everywhere you go. You will be expected to know it inside and out. It is also good software. Say what you will about Microsoft, but Office is good software, full stop.
Getting back to the issue about required hardware, you don't need 2GB ram and 256MB video ram to run instant messaging apps and typical productivity software. Don't get me wrong, I personally like very fast computers and have always built powerful workstations for myself. However, I do not agree with your recommendation of what he needs. If he has the money to waste, then by all means, he should get the best system he can. However, he can get everything he needs for less than $1000. If he can find a system with the specs you recommended for that price, great. If not, it's not a big deal, and he should get what he can without spending a fortune.