It's not easy to summarise in just a few words why someone should upgrade to 2010, because there are so many changes from 2003 and even 2007. The truth is that you will be left behind - that's not just a meaningless phrase - in the WAY you work. Most of this has to do with interfacing with the external world through the internet - but not all. Some of it also has to do with your quality expectations.
Word is getting closer to desktop publishing, and has significantly enhanced, for example, its graphical production and manipulation capabilities. For a technical writer this is magic, as you can produce your process flows and the like as 3D images, directly in the document, and continue to update and change them if you need to directly in the document. For serious image editing or process flow diagrams you will still need the correct professional software, but for most of what we do, Word is now pretty good.
Then there are speed of work and accessibility enhancements. My experience here is that new users love the new versions and adapt very quickly because they really ARE user friendly. Long time users who have mantrams in their heads (like File, New) for finding commands will have to allow time for new mantrams to replace the old ones. However, I am a long-time user and it took me two days to start to see speed and productivity improvements.
Regarding master documents I think they may be on their way to being redundant. My books are entirely written in tables with hundreds of illustrations that I do nothing to compress, and I have not hit any limits yet with writing them as a single file. First, the docx file format saves a document to about half the size of a doc file. That helps. Then, if you have a decent computer, 20-30 mb files don't even cause a slow-down and, in my experience, don't crash. Working with 2007, I edited every book on an educational publishers list over two years, and did not reach any limits. Now using 2010 for my own books, they positively zip along.
Personally, as a remote worker, I love the collaboration features and the ability to publish to a blog. I can't find many people willing to collaborate on-line yet, but that will come. Did you know that two of you can remotely access a single document and work on it simultaneously without technical conflicts, and that you can message one another about the changes you are making? Imagine what that means for people writing articles, or marketing materials or having to meet a serious deadline?
That's just a few things. I suggest to anyone who is nervous that they download a trial copy of 2010, install it alongside their own version so that they have both, and discipline themselves to work through up to date training materials (like mine). Take care with these as many books have been updated from the 2003 to the 2007/2010 interface but do not include the 2007/10 functions and features, let alone enhanced ways of working
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