I'm kind of a word processor junkie, and while Mellel certainly handles all of this very well, it lacks (imo) some of the graphical pop that you will find in some of the higher end word processors like Word '08 or Pages. FWIW, my go-to wp has been Pages for about a year now. I like it very much, although it is a hassle interacting with folks that use Word (which is, sadly, most of the known world).
Yes, I am a bit of the same, and have used Pages, Word, and Mellel each a good bit to evaluate them well enough over the past two or three years. Each has its own strengths and weaknesses, but I run into the same issue that overall, it seems to just be more practical to have Word. Mellel is better for Unicode Hebrew, but after my dissertation, I'm not sure if I'll use it again. And I'm especially intrigued now that Word has a reference manager. I may just simply go back to Word exclusively within the next year.