I am not too sure what Microsoft's new online initiative, Office Live, will achieve. I think this was developed in response to the successful Googledocs applications. However, the Microsoft online application suite will require that one owns a licensed copy of Microsoft Office XP, 2003 or 2007. This appears, in a sense, self-defeating. What I can see is that Microsoft is hoping that the launch of Office Live will prevent a flight of existing Office users to Google.
I have tried OpenOffice/StarOffice and Googledocs in the past. OpenOffice was horrendously slow. Googledocs was satisfactory, I guess the only thing against it is that it is unusable without an Internet connection. I don't have an anti-Microsoft bias like many manic people out there, however, Office Live is slow and ponderous, highly unfriendly.