Yeah, again it's a YMMV. GDocs' .docx rendering is dismally awful compared to LO, and using LO to talk to .docx is my main compatibility point.
What I really want is LO to read/write to Google Drive transparently, but that's still an experimental feature (though it works well in TDF builds, but only for password authentication, not for two-factor). Again, it awaits someone spending money on it.
We use them; I haven't had MS Office installed since... I'm not sure, but I think it's been more than a decade now. I used OpenOffice for ages, then LibreOffice.
For work we MS Office or LO for MS docs from elsewhere. LO is much better at correctly reading in MS-generated docs than Google Docs, and of course MS Office for people who spend most of their time dealing with documents from outside (not me, thankfully).
We use Google Docs for all of our internally-generated stuff, though -- the concurrent editing in particular is quite useful. We sometimes collaborate on docs, and each person can add their section at the same time. You can review someone else's work on a spreadsheet while they're doing it.
I recently went through an important (and politically complex) meeting where the CEO and I shared a Google doc for taking notes. It was awfully convenient; I could provide him constant feedback on technical issues but let him decide what to actually say, and how to say it.
I'm less happy with how Google Drive is integrated with Google Docs (not well), and I'd like to see concurrent editing in Sites, but maybe someday...
How so? They seem extremely productive and reliable for the org I volunteer at as treasurer.
I've never seen a financial report with an incorrect addition, or hear anyone complain about the word processor.
My kids use google apps at school for things like writing essays and homework submission. Again, "just works".