Using the workspaces, you can create a new, blank Word document. Select the "New" drop down list. In the list, select Word Document. This will present you with a blank document. You can also upload documents directly from your disk to share and for collaborative work. You have options to upload single or multiple documents.
When you click Upload Documents, the Open File dialog opens (Fig 4). Select the documents that you wish to upload and click Open in the dialog. You will get a status dialog showing files being uploaded. After the files are uploaded, you can see them in your Workspace.
Once the files are uploaded, you can use Word's online editing, saving, and sharing features. To edit a document, click on the name of the document and it opens up for viewing. To edit the Word document, click on Edit (Fig 5). This opens up the document in MS Word. Among other buttons available are Save As and Share. Save As stores a local copy of the online Word document. The Share option helps you share the document with others. The Activity command shows you recent activity on the Workspace so that you know who else has accessed the Office Live Workspace. To remove an online document, just select the checkbox against it and click on Delete.
In short, it is very easy to use Microsoft Word online. Once you start using it online, you'll know that it is the most convenient way to handle, share, and work on projects that involve more than one person (For example, ebooks - you can distribute sections to different people and also share it with a proof-reader).
Note: It appears that Microsoft is discontinuing the service. When you login into Office Live WorkSpace, you are told that your workspaces will be transferred to Windows SkyDrive as folders. Other than this, Microsoft has not said anything about discontinuing the Office Live service. Its Twitter account and Facebook pages are still there and so are the help files for using Office Live. Windows SkyDrive is a great service with Free Office Web Apps that let you create and use Office files without the need for a local copy of MS Office. For details on using SkyDrive, please read our article: SkyDrive Tutorial.