Looking out for the above requirement

All text apps I've found (and love) are NOT free. Consider putting down some money for a great app like Pages.

Yup, don't be a Scrooge, go spend some cash. It ain't gonna break the bank.

Yea spend some cash nothing is expensive on the apps. I have filled my pad with usefull stuff.

This question gets asked every so often. So far no one has come up with a free app that a decent job. The good (and even mediocre) apps all cost. Not surprising. Office apps are not trivial to develop, and advertising and in app purchases an unappealing and impractical income model.

If you have a fast internet connection and live in the US you could try one of new virtual desktop offering: OnLive and CloudOn. Because of their nature and the fact that they are new, there are some issues; however you won't find a more Microsoft compatible choice on the iPad. The apps and basic accounts are free, however you may have to wait and keep an eye on things. They are only allowing new users as they get more servers online.

You will also need a DropBox account to copy files on and off of the virtual desktops.