How I draft (brutalize the English language) using (mostly) free software.
I'm a cheap bastard, there is no question about it. I also strongly believe in keeping data formats open and understood. To that end, I do all my drafting in simple text documents.
* Subversion (SVN), a version control software that allows me to roll back to any saved version of my document
* Vim, a text editor that is insanely configurable and comes in both text mode and GUI versions. See below for the configurations I wrote.
* LibreOffice and Language tool for final drafts that go off to publishers. Recently I've been using the AtD plugin.
* SuperNoteCard is a nearly perfect digital notecard solution. (Not free, but I'd pay twice what they are asking.)
* Storybook is an outlining software, kind of nice for some things, stick with the free version though, the export feature only works for certain datasets anyway.
* After the Deadline is pretty snazzy, there are various plugins. I usually use it with LibreOffice, but, I did find a way to make it work with Vim.
I primarily draft on an old laptop that runs a text mode GNU/Linux (Ubuntu), I do a bit of the final polishing on my netbook which also runs Ubuntu, but in graphics mode. Then, truth be known, on the rare occasion I need MS Word, I have a virtual machine running Windows XP.
Using basic text mode tools allows me to do stuff like make pretty graphs, automatically post my daily WiP info to twitter, and stuff like that. The stuff like the vim configuration was built up as I needed it so there really wasn't much of a hit in time, just a tweak or two when it became clear there might be a nicer way to do something.
As you might have guessed, most of this is re-purposed from tools to manage source code, html or text configurations, but it works pretty well for this too, I think. All of this stuff is available (free!) for OS X and MS Windows too. Why not give it a whirl?