If you do the dual-boot thing, make sure that the Desktop Mgr INIT is installed in 6.0.x. That way, when you switch back to System 7, you don't have to click cancel as soon as the desktop rebuild dialog box appears. Otherwise, it gets about 1/5 of the way through and hangs.
My personal preference for a WP on a 68K Mac is MacWrite II... But, usually I just use ClarisWorks.
-J