One way would be to right click a file, then select 'Open With' 'Choose Program' select the relevant part of office. Tick the 'Always use the selected program' box and then OK it. Do this for Word, Excel & Powerpoint.
Is it worth upgrading from 1.1.4 to 1.9 ? Well 1.9 is much more Office like in appearance, so will appeal more to Microsoft fans, the database is much better and it is a more polished product. The layout is almost completely revamped, so even as an update, there is a learning curve involved in the transition. But it's a beta release and while perfectly usable isn't 100% bug free. In the end it depends what you want from an Office Suite, both are quite capable of doing the job as they stand.