There is a multitude of writing and editing software out there if you're interested in using something outside of Microsoft Word, Open Office, or your standard text editor (STE). There nothing wrong with writing your novel in a STE, assuming you can keep track of everything. I'm all for simplicity -- after all, I was initially one of those web programmers that refused to use HTML editors and wrote everything in Notepad. However, I eventually broke down and admitted that an advanced editor could make things a lot easier on me, but only if the risks of the editor adding nonsense code didn't outweigh the benefits of using one to begin with (a certain Microsoft HTML editor oft cursed by tech professionals comes to mind). I almost exclusively wrote my first novel in Microsoft Word. I began searching for something else when it became clear it was simply too difficult to keep track of scenes and move items around if I kept the entire thing in one document.
I started out using Jer's Novel Writer, which is now free since Jer has gone and gotten himself a regular job. I liked the concept and enjoyed aspects of it, but during NaNoWriMo 2009, I found it simply crashed on me too much (I'm running Mac OS X 10.5.8). This resulted in a flurry of lost work and some hair being torn out over it.
I switched to Scrivener for a free 30-day trial at the suggestion of a friend and never looked back. I ended up purchasing the program before the full 30 days was up, I enjoyed it that much. It's a wonderful program that allows writers to both organize their work into scenes, chapters, acts, etc. and also store research (websites, files, pdfs, etc). In addition, it also includes its own storyboarding area where scenes can be arranged and index cards written up. The only complaint I have is that there is no way to export the index cards or to print them out, which would make this software above and beyond the rest -- though it is already head and shoulders above Jer's Novel Writer (sorry, Jer). Scrivener also allows you to export an entire draft into manuscript format, including setting up fonts, sizes, page breaks, which scenes to include, replacing italics with underline, etc. -- although I have had issues with it exporting in single spaced rather than double spaced, as requested. It's a minor issue to say the least! Plus, you can export all files in your draft to a backup folder, which is fantastic if you plan on making significant cuts and changes to your novel and you're nervous about wanting access to the old version.
Jer's Novel Writer (Wish that it had worked on my system.)
Other writing programs I've heard good things about (but haven't tried myself):