@Dr Herbie: How did you manage citations? Word didn't have built-in support for that until Office 2007, and doing it manually... *shudders*
I actually wrote my dissertation in TeX. Not because there's a requirement, but because it's much easier to do than Word. Of course, part of it is because I was using content from papers I've written that were written in LaTeX, but it's also just because I have ~150 references that are much easier to manage with Bibtex than with Word. Also, although you sometimes have to struggle with LaTeX's stubbornness when it comes to laying out images (it does like creating pages of floats even when that wastes tons of space), it's nothing compared to fighting with Word when it refuses to place an image where you want it in a large, complex document (we've all been there).