You can actually install lots of other operating systems on a Mac, including Windows. However, many don't use a Mac for GNU/Linux or other similar operating systems because these systems use drivers written to support specific hardware, which tends to be stuff popular in the PC world but not used much by Apple, so lots of little things don't work well on an Apple if you're using a non-Apple operating system. Case in point: wireless -- quite hard to get working on an Apple under GNU/Linux.
Applications (apps), like Word etc., need to be written for a specific operating system, like Windows. Because windows is so popular, most people write for that, because it makes good economic sense. This software will not run anywhere else, including the Mac, without some sort of other software to fake it on the other platform. You can get Windows software running though, but it's not great. There's also (for this very reason) far more software for Windows than Apple Mac OS.
This isn't totally bad though. Most people think lots of choice is good, and that's not true. Some choice is good, but most software for Windows is utter rubbish. The stuff that everyone uses that's actually good (like Microsoft Office) is also available on Mac OS too. Same with everything else like web browsers, and everything else you use regularly too. The only warning here is that some more specialist software (as rojash points out) is only for Windows (I believe some professional accounting software, for example), and so using a Mac here isn't that feasable.
Because Mac OS is more secure than Windows, and also it's also less popular, there are far fewer viruses for the Mac. In fact, there are no viruses that actually run round in the wild for Mac OS X at all. Zero. But even on Windows, as long as you have a virus scanner you should be fine.