Many people (myself included) are finding that Google’s online applications are more and more a part of our everyday lives. Finding entry into our lives initially through Gmail (Google’s version of free web mail service), I am now sucked in to the Google Toolbar in Firefox, Google Calendars, Google Documents (with great file sharing and collaboration features!), and even use Google’s Hot Trends (currently in their “lab” section) to look into Internet search patterns for marketing trends.
As far as replacing Microsoft Office anytime soon, I don’t think it will happen. But for someone looking for a good set of services that they can access from anywhere, share important info with others, it’s a great set of tools. But don’t take my word for it .. check it out for yourself!