Echoing what has just been said by JohnInKansas do all your writing as separate files in plain unformatted text (one file for each poem or story). Nothing wrong with something such as Windoze Wordpad although it doesn't have the inbuilt spell checking that fully featured wordprocessors have. That said, at various times mudcatters have recomended different free standing spell checkers as being good. If you are using a specialist vocabulary, you might want to use a checker which you can customise with extra additions.

The big downfall of using a word processor is that you can get a series of pages which print off okay, but then you need to alter one item on the first page. You then find that it has turned one line of text into two lines, knocked the bottom line from that page onto the next one and changed the layout of every consecutive page. Desk Top Publishing allows you to make small corrections to prevent this happening (e.g. it can squash all the letters within a paragraph together so you don't notice, but it will keep the last word on the line rather than it starting a fresh one).
It also allows you to make text flow to where you want it (e.g. story continues p4 col3) rather than where the wordprocessor wants.

As for output - you need to discuss with the printer or publisher what they can most usefully handle. Are you loking at a document in black and white or in colour? What kind of illustrations will it contain? Photos? Line drawings?
I used to produce camera ready back and white text but left a black box where a photograph was due to go. My printers used original photographs, scanned and resized them and inserted them into the document ready for the printing press.

Consider the extra cost of adding colour. Anthing black uses a single printing plate. Add a single colour and you need a second plate. Add complex colour and you will need a black plate plus the three printers colours (cyan, magenta and yellow) which will also need processing to "colour separate" a photo. It all adds to the overall costs and the final price for the job. On the subject of photos, a professional will have expensive professional equipment which will do the job of scanning a photo at a much higher resolution than anything a home user is likely to have.

Quack!
GtD.