When Don Knuth wrote TeX, the engine underlying LaTeX, he made sure that typesetting was a top priority. This includes all sorts of novel spacing, hyphenation, and other algorithms. See some more examples here: http://en.wikipedia.org/wiki/TeX#Typesetting_system

For anyone who appreciates Typography, there are few things out there that can produce aesthetic results as pleasing as LaTeX.

It does have its downsides though, no question, including a steep learning curve, unintuitive error msgs etc.