Strictly speaking, the installer program for Openoffice 2 says it's version 1.9.79, but what's 0.0.21 of an upgrade between friends? We're more concerned about the daft decision to tack '.org' onto the end of the name.

But that's by the by. As you may already know, Openoffice is the open source suite of business applications that's gradually gaining wider acceptance as an alternative to Microsoft Office (just as Linux is an alternative to the Windows operating system).

The business software market is still strongly dominated by Microsoft, of course, so this upgrade concentrates on improving compatibility with Office documents and making existing Office users feel more comfortable about switching.

The main programs are Writer (word processing), Calc (spreadsheet) and Impress (presentations) and they look and feel much like Word, Excel and PowerPoint.

They now have more flexible toolbars that can be rearranged to customise the workspace. There's improved support for Microsoft's XML file formats, plus the suite has a new default XML format called Opendocument.

All this talk of XML may sound rather obscure, but support for this is increasingly important for large corporations. In addition, the Opendocument format is one of the official European Union XML formats. Supporting it means that Openoffice can be used by EU departments themselves and also by companies that supply products or services to the EU.

Moving on to the individual programs, the similarities between Writer and Word are striking and Writer now includes features that are directly comparable to Word. One example is Customshapes, which mimics Autoshapes.

These are vector graphics objects, such as stars and arrowheads, which you can add to your documents to create diagrams or flowcharts. As well as being a useful addition, Customshapes are compatible with Autoshapes, which means you can now import Word documents that contain Autoshapes into Writer.

Writer is also now better at importing Word documents that contain tables and its own table tools have been improved, allowing you to create 'nested' tables by inserting small tables within the cells of an existing one. And Writer has added some features of its own, such as text frames that can be set to automatically shrink or grow as you alter the text within them.

The Calc spreadsheet hasn't been changed drastically but it does have a few important new features. The Excel export filters have been improved and Calc can now handle spreadsheets containing up to 65,536 rows, the same as its rival. There's also a new filter called the Datapilot, which is similar to Excel's Pivottable data analysis tool.

There aren't many changes to the Impress presentations program, but there are major improvements to the suite's database tools. Previous versions of Openoffice did have some powerful database features but you needed to be proficient with databases and SQL programming to get anywhere with them.

This aspect of the suite has been completely reworked, with the inclusion of a new database program called Base. This can be used to create database files, reports and queries, just like Access, Filemaker or any other conventional database.

There's even a wizard to help new users get started with creating and managing their databases. The only minor drawback here is that Base is Java-based, so you'll need to make sure you have a 'Java run-time environment' installed on your PC before you can use it.

Admittedly, Openoffice still can't match the vast range and depth of features found in Microsoft Office, but as Microsoft itself often says, 80 per cent of Office users only use 20 per cent of its features.

With that in mind, there's no doubt version 2 is more than powerful enough for most home and business users and can certainly give Microsoft a run for its money, especially since it's free.

And for corporate users who need proper technical support (which isn't available with the free version), there's a retail version of the suite called Star Office. This costs $50 (£26.26 approx) and is supplied and supported by Sun Microsystems.