I don't have problem with the last reason. I use EndNotes to manage my reference since undergrad. However, the first two are very important if I need to work on a project with other people. So I decided to learn how to solve them using Word.

I found that the first problem is tricky to solve: most version control system such as SVN or CVS are line based. The latest version of Word can save plain text XML. But it is still XML nevertheless. So you can check the files in using SVN in text mode. But it is useless for updating. So we have to wait for a XML based version control system.

The second problem turns out to be easy to solve. This function has been in Word for some time. All you need to do is write a sub document (another Word file) then link it back to the main document using the {INCLUDETEXT "filename.xml"} directive. I tested it on the ACM Word template and all the indexing works.

I will experiment this with my current course project. I post the template under the Files listing on this site if you are interested to use them. Please note that the materials are copyright of the original creators (I think it is ACM in this case).