Not that I use these things much, but on a few other occasions I have had the need to use Google Documents, and was quite contempt with it.
The scenario where I would personally see the need for these kind of applications is when I want to share documents and stuff, and also be restricted with not having the Office programs available, e.g. WebCafes etc.
So today moved by all the hype around the announcement of Office Live Workspaces I gave it a try, and I am impressed. The interface looks elegant, and I like the built in list functionality. What I was originally expecting was a scaled version of WSS on the web with a lot more functionality, but this seems better and more purposefully.
But now my requirement for having to be able to edit my documents in browser doesn't seem to be available, the site loads documents in the desktop Office client or requires you to install a browser add-in.
You guys can check it out, its currently open in Beta.