You know what most people would do? Use a dedicated program to create the plots and equations, export it as a PDF, and embed that in Word.I am not fond of LaTeX. However, for some fields there are simply no dedicated programs, while there are good LaTeX packages. For instance, for my thesis I drew a lot of attribute-value matrices (in the unification grammar/HPSG sense). There is a great packages to draw these structures, both flat and in tree form.
I had some hope that DocBook et al. could replace LaTeX for most uses. It's great in many respects: it's just XML, so easy to machine-interpret. Customising output is easy (via XSL stylesheets). There is good support for producing PDFs (via XSL-FO). And it supports SVG and MathML. There are also great WYSIWYG editors, such as Oxygen. However, that toolchain never became popular, because most people hate XML.
The book that we never got to finish[1] is written in DocBook, equations are in MathML. The Slackware book that I once wrote [2] is also completely done in DocBook.
[1] http://nlpwp.org/
[2] http://rlworkman.net/howtos/slackbasics.pdf