Google Docs & Spreadsheets is a free, Web-based collaborative office suite. Users can make and share documents and spreadsheets with anyone who has a Google account. What makes the service really interesting is that multiple users can be concurrently working on the same document. All files are stored for free on Google's servers, and they 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 also recently rolled out a compatibility with its Gears extension that will let users edit their office files while offline, which can be useful if you're jumping in and out of range of Wi-Fi or cellular data while out and about.
Winner: Google Docs and Spreadsheets (Docs.Google.com)