Google Docs & Spreadsheets is a free, Web-based collaborative office suite. Users can make and share documents, spreadsheets, and presentations with anyone. What makes the service really useful is that multiple users can be concurrently working on the same document. Also, all files are stored for free on Google's servers, and can be accessed from any computer with an Internet connection.
While you need to be connected to the Internet to use these applications, you're also able to export Google Docs & Spreadsheets files to work with Microsoft Office and several other formats. Google Docs also offers the capability for users to edit their files while offline using Google Gears, which can be useful if you're jumping in and out of range of Wi-Fi or cellular data while out and about.
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