We've been thinking about document file formats that we need to support in an application and Microsoft's free Rich Text Format seemed like a good option. It's being updated frequently (MS Office 2007 incorporates the new RTF 1.9.1 standard) and is supported by pretty much every major word processor (MS Word, OpenOffice, AbiWord, ...).
Instead of having to build support for the MS Word 2007 & 2003 format and the OpenOffice formats, it's easier to just build in support for RTF and that's that.
Some applications specifically need PDF documents for security but that's a whole different ballgame.
EDIT: There's a pretty good Wikipedia article on the Rich Text Format (RTF) and this Microsoft webpage is pretty detailed too.