One issue that I've not seen discussed is how Office Web apps will interact with other hosted applications.  The scenario in question is where a user has multiple hosted applications from different vendors.  For example, Hosted Exchange via OWA, Hosted QuickBooks, and Office Web.  If the user opens a Word attachment in OWA, OWA will download the file to Windows.  When Windows recognizes a Word file, will HOSTED Word automatically launch and open the file? Similarly, if I open an Excel file from QuickBooks, will Hosted Excel launch and display the file automatically?  This is the experience end users expect with Office installed locally.  Google does not support seamless integration of hosted apps.  One must do the upload/download hokey pokey to get the files from OWA to Google Docs.  Will Microsoft get Hosted Application file interaction correct?