I've written two books and several film scripts in Word, all with one file per piece. It was also an easy way to take a mailing list of Literary Agents from a table on the web, drop it into Excel and then mail merge the entire thing into a letter template I wrote in Word, because yes, you do have to print things when you're submitting to most publishers.
It was never a nightmare and I never lost the whole thing in one fell swoop. Sounds like FUD.
While I'm not saying that TeX/LaTeX isn't a good way to go, writing a book in Word, applying styles and publishing all worked pretty seamlessly and effortlessly for me.