It's quite important in mathematics and reasonably important in physics. Almost all of my fellow students in my undergraduate physics labs use LaTeX to typeset

It's quite important in mathematics and reasonably important in physics. Almost all of my fellow students in my undergraduate physics labs use LaTeX to typeset their reports, and a quick browse of arxiv should show that it's dominant amongst academics. It's one of the few piece of software that actually typesets mathematics correctly and well. Don't get me wrong, from what I've seen recent versions of Word have improved hugely and even innovated with OpenType math-extensions which have then been adopted by TeX, but TeX still leads the way. One of the most significant advantages it has over other systems is sensible defaults. Everything from the choice of default fonts down to the margin sizes are chosen to look well enough from the beginning.