You can. You can use your Amiga to write anything you want :p As far as program compatibility goes, try to find a format that's supported by Open Office and Amiga software. Of course, you probably did that already, right?
Of course I can, I can even print it out since I have a JetDirect capable printer. I need to look more into what word processors are available for the Amiga. Was even considering learning C so I could port Abiword. Of course it'd be easier if the Amiga had a port of GTK+ or a way to easily port GTK+ software to MUI, which I think would be the correct way to go.
Unfortunately I have too many other things I'm trying to work on right now. But it'd be pretty awesome to have a new word processor that supports all the formats for the Amiga. I know they are working on porting LibreOffice to Amiga 4.x, but it's a huge behomoth and would never be able to run on Amiga 3.x, unless you had oodles of RAM.
Thanks for all the input.
slaapliedje