Around here I've seen a considerable drop-off in TeX fans over the past 4-5 years, with more students opting for Word. It didn't used to be a viable option, but now many conferences (outside a few very-math-heavy areas) offer both LaTeX and Word stylesheets and let you choose, and Word has improved in a few key areas, mainly citation support and auto-hyphenation. Zotero users also seem to like the Word integration. Figure placement still sucks, but figure placement isn't really TeX's strong suit either.

I personally still prefer TeX, but the gap is smaller than it was 10 years ago. The auto-hyphenation is probably the single biggest change, since the easy way to spot 2-column conference papers done in Word used to be the horrible whitespace in justified columns caused by its inability to break words. (This heuristic still words sometimes, because auto-hyphenation isn't on by default, and not all authors know about it or use it.)