Write your fiction in a text editor. Keep your working copies in text files. Sticking it in a fancy formatter like Word is fine if you want to print it out there and then, like to send it to someone, but a really poor idea for keeping primary versions.
From a tech viewpoint, the less formatting the file has the longer shelf life it has. A plain text file written in Notepad in Windows 3.1 is still able to be opened, viewed, edited and saved in a format that Windows 3.1 can actually use (as well as Windows 7 Beta and even works on a Mac or Linux system, too).
OpenOffice.org can open Word files and even save them in a format that Word can also open (other than PDF), except all the formatting isn't always going to 'stick', and the more there is the worse it can be.
When I write, I save what I'm working on in a couple of different formats, one of which is usually a .txt file, one is the native file type of the word processor and then either an html or PDF file (sometimes both). My working copy is the txt file and the 'finished' ones are the other formats. It doesn't really take any more time to do it that way, just a couple of extra saves.
The other thing to do, no matter what you are using to write in, is to make multiple copies of your work. Save one set on your hard drive, burn another to a CD and save it on a USB stick or other external device--that's at last three copies. It isn't a question of if you will suffer drive failure and data loss, but rather a question of when.
