I use a word processor for my exams.
It's a huge, huge bonus. The best part of it is that I can go back and rewrite any part of the essay. Consequently, I usually write my introductions after I've written the rest of the essay. I don't have to plan everything that I'm going to say before I start writing; as soon as a I think of something, I can write it down.
Is it unfair? Totally. I imagine the point of being able to use a word processor is to put you on equal terms as those who write by hand, but word processors give distinct advantages that those who write by hand do not have.
For those wondering, I use a word processor both because of illegible handwriting and a certain condition that causes me to think in different, slower ways. I also get 25% extra time, and the fact that I can type really quickly may have contributed to me getting a word processor.