I share the gear and techniques I use to get stuff done in this interview with usesthis.com.
I write my manuscripts in Word with Zotero as my citation manager. I've tried LaTex, because that's what all the cool science kids are doing, but I don't think the hassle is worth it. Show me a LaTex evangelist and I'll show you someone who doesn't collaborate with Word users. There's too much software hipster-ism out there. I think you should use the software that best gets the job done for you.