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A comparison of some of the finer points between Google Docs and MS Office Web apps
Price: Both MS Office Web and Google Docs are free to personal users.
Design: Google Docs has a clean, easy to understand interface in keeping with the Google philosophy of user-friendly interaction that built into all Google products. Microsoft, on the other hand, tends to like bells and whistles, and in this case, it's probably a good thing in terms of additional functionality. Since Office Web apps will be very similar to their desktop applications, the learning curve for the average user will be minimal. The clear winner in this category is Microsoft.
Collaboration: The strongest argument for Google is it's collaborative, or real time document sharing functionality. Microsoft promises a similar functionality, called co-authoring, but the details seem overly complicated, and it's not clear whether more than one person can work on the same document online or whether it must be downloaded to each user's desktop first. Until the process is clairified, Google wins this round.
Presentations (& sharing of same): Microsoft and Google both allow you to create, edit (editing is limited) and share presentations online. Google's browser-based sharing allows you to share it with anyone, instantly. MS requires the download of an add-on product, Communicator 2007 R2. Google wins this one due to sheer portability..and the fact that Grandma doesn't have to download and install another Microsoft program before she can see your daughter dressed as an elf in the Christmas parade slideshow.
Spreadsheets: Even with less functionality than the desktop version, Microsoft wins hands down over the limited functions available with Google Spreadsheets. Microsoft also promises easy web publishing for blogs, websites and wikis.
Word Processing: Let's face it, word is the decisive factor in this race. Google holds out pretty well, almost equal, in other areas, but putting Word, with most of its functionality (including auto-correct) online with the same familiar look and feel makes Microsoft the winner of this point.
Conclusion: Assuming Microsoft delivers on all its promises, Microsoft Office Web Apps compares favorably to Google Docs and will edge out Google in document sharing online by a hair in terms of features and familiarity, but Google will stay in the race with portability and useability. At least that's how it shakes out for now.
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Benefits to You as a Designer
Regardless of whether you choose to work with Google Docs, Microsoft's web apps, or something else entirely, knowing these free tools are available to help you when you are in a pinch is great for many web designers. Uploading and storing your documents online means you have access if a client needs information, even if your computer melts down or is rerouted to your Chicago meeting by way of Zimbabwe. Document sharing online allows you to collaborate with other designers without a high dollar program. Having these utilities as a backup can often make or break productivity.