The net has been buzzing recently about Google's announcement of Google Apps Premier Edition. I've heard a lot of talk, mostly how this is the Microsoft killer, or that the apps are useless and humble in comparison to Microsoft Office.
I think these are both true, to a degree. I have used Google Docs and Spreadsheets (as well as Reader, Adsense, Blogger, Gmail, Search, and probably others, so maybe I'm just a Google fanboy) and I think it does an excellent job at what it is.
I've spent most of my time in Spreadsheet. I have used it collaboratively as well as for my personal documents. For collaborative efforts, it certainly outshines the typical 'email around a document and everyone revise' workflow. There was a case recently where I was on the phone with a coworker and we were working up a spreadsheet to model something. This worked brilliantly for this task, as we could both update it and see the updates in real time. I've also had another situation where I wished we had gone down this path. Instead, we were all looking at the same Excel document (each on our own computer) trying to explain the concepts to each other without being able to illustrate our points.
It is not Excel. As far as I can tell, you can't graph or import graphs. It is a basic math spreadsheet. If you want a graph, or fancy formatting, etc. you will need Excel. This is OK for many people but some people will need to use features in Excel that are not in Google Spreadsheet.
Over time, the feature set will improve, and if Google does well with reliability and security, people will gain confidence in the service. If we trust the web for our Email, RSS Feeds, etc. why not to edit documents?
After all, the network is the computer, right?