Mary Jo Foley's first impressions
Office Live Workspace is not a hosted version of Microsoft Office. Instead, it is — like the rest of the Office Live family — an extension to the client-based version of desktop productivity software. Interestingly, Office Live Workspace isn’t just an extension to Microsoft Office 2007, but also third-party-developed office programs like OpenOffice, StarOffice and more, as well as Office XP, according to Jha. However, as you might expect, Office 2007 will work best with the new Live Workspace feature (other third-party and older Microsoft software won’t “light up” the same way, Jha said).
I haven't seen Office Live Workspace yet, but I suspect it will in some ways represent a logical extension to Windows Live Spaces; it's clearly a cumulative build, with a common set of foundation-level services for identity, access control, storage, etc., and a global network of super-sized data centers to make it scale to address the estimated (by Microsoft) 500 million Office users worldwide.
» Microsoft finally unveils its answer to Google Docs | All about Microsoft | ZDNet.com
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