Here is a growing list of my favourite GNU/Linux applications. You can see that it's perfectly up to most of the tasks that people use their computers for day-to-day, and more.
You might notice that a common theme is that applications I tend to like leave you in control rather than doing all sorts of things behind your back. On the whole, I like them configurable but fast and light-weight, the exception to the latter being Emacs, I guess 8^)
In addition, if you don't like something about an application, you can always download the source code, modify it and rebuild it. I've done this with a number of (small) applications. What other operating system offers you that? That's true Software Freedom.
Also known as the Unix shell. Here is real power that Windows users can only dream of. The terminal is a window into the very innards of your machine from which you can accomplish anything your machine is capable of, not just what some Visual Basic programmer thought would be nice.
Sometimes the power of the command-line is so sufficient that I don't even bother to boot into the GUI.
I continue to be a fan of the Opera browser. But, although it can be obtained free of charge, it's not Free Software in the true sense, which is a shame.
However, I've recently moved over to the Mozilla Project's Phoenix Firebird Firefox browser, which is truly magnificent.
What distinguishes it is not so much the features—it comes fairly bare—but the extensions. Install the Live HTTP Headers extension and the Web Developer Toolbar and you'll wonder how you ever coped without them. In principle you can even write your own extensions: I managed to write one to import some favourite Opera keystrokes to Firefox. But I really don't recommend trying this at home. It made my head hurt for three days.
OpenOffice.org has finally come of age. It was initially developed by Sun Microsystems as StarOffice, but early versions were pretty horrible to use. Sun eventually open-sourced it and nowadays it is very usable indeed.
OpenOffice allows me to survive in the Windows-only (except me!) environment at work: I can read and write Excel, Word and PowerPoint with reasonable reliability to share documents, and for my own use it is ideal. Unlike Word, OpenOffice has never shafted me at a crucial moment, and many of its features are far more logical and usable (eg. numbering).
The one let-down is the quality of the documentation, in particular in the help system. But there are a great number of howto's and help pages out there on the web.
The ICE Window Manager is a light-weight and fully configurable desktop environment. I like it clean and simple. It doesn't have as many "features" as KDE, for example, but who needs them? It's faster too.
More than just a text editor: Emacs is a lifestyle. It's a mini-operating system all of its own; I also use Emacs under Windows which serves to free me from much of its tyranny.
Emacs is a venerable part of the history of the Free Software movement: I've been using it since 1992.
I also often use it for email and news-reading.
Listen to those MP3 files with xmms. And, until recently, you could tune in to the Ogg Vorbis Radio 4 streams from the BBC as well, so the nasty RealPlayer can finally be dumped. Hopefully they will bring them back again soon.
I think I'm right in saying that the Apache HTTP server is used to deliver more websites than any other server software, including the one you're reading now. And you can have it on your desktop computer! It's incredibly configurable but easy to use, and very useful indeed for testing websites before putting them online.
IPTables is not strictly an application, since it's mostly built into the kernel. It's an industrial-grade firewalling capability that can be installed on any old computer you happen to have handy. It gives you absolute control over your network connection.