Latex is a substitue to MS Word. Its a typesetting language just
like HTML. I am not an expert of Latex but I am a regular user. Let me
tell you some pros and cons I have noticed.

Cons:

1. There is substantial overhead associated with starting a Latex
documents (like headers and stuff) so it becomes infeasible for small
documents (1-2 pages).

2. There is a steep learning curve. Several things are counter intuitive. 
You need to keep a manual on your desk all the time. Everytime you want to
do something 'new', you have to read it. Its takes years before you become
an expert.

3. Spell check/Grammer check is a problem.

Pros:

1. When the document is more than 10 pages. The overhead in Latex is
amortized and for longer documents it is better than alternatives.

2. Everything is saved in plain text so you can use CVS with Latex files.

3. The documents generated look much more professional. Their fonts are
very nice.

4. Latex provides a lot of precision and flexibility with size and
placement of figures, tables, headings etc. Since its text based, you can
adjust lengths to 100th of an inch.

5. You dont need to use a mouse to use latex.
 
6. Nothing is impossbile in Latex. Where there is will there is a way.

If you read the above, you can see exactly why all graduate students use
Latex.