Open Office is an excellent suggestion.
And for saving the finished newsletter to pdf I suggest DoPdf. It is an excellent program and it is free.
It installs as a printer in your computer and when you want to create a pdf file you simply choose the DoPdf printer and it creates the pdf.
I would also suggest that you search for Free newsletter templates. There are many very nice newsletter templates out there. They are already laid out with a nice design and all you have to do is replace the text with your own text and you a nicely designed newsletter.
Here is one good link... there are many
I am currently using the 2nd one on that page. It is called professional services newsletter.