To my mind, the killer feature of Google Docs is not that it is Web-based, per se. It's that it makes real-time collaboration easy. You can invite a user into a document you currently have open, and you both can edit the file at the same time. It's not a feature you're going to need all the time, but when you're on a deadline and need to get sign-off from one or more other person on a document right away, it's a life-saver (see also: Zooos).
Fighting this killer feature is Microsoft Word's own killer feature, which is: Everyone in business has Word, and most people know how to use it effectively. There are plenty of people who would use a simultaneous editing feature in Word if it had one, and who aren't going to switch to Google just because it does.
The service works as a plug-in to Word, adding a collection of buttons in the "Review" tab. These new functions let you invite users into a document, push your changes to the Web, and read in new changes.
While Plutext does not support strictly simultaneous editing (you have to intentionally publish your changes and get new updates), neither does it let two users get out of sync by letting them work on different versions of the same file. You really can have a dozen people in the same document at the same time. Plutext uses Word's existing Accept and Reject Revisions function to review changes other people have made on your open document.
With Plutext, you won't have the problem of multiple versions of the file floating around with different revisions in them, nor will you run into the issue of trying to open a document to edit it only to find that some other user has it opened and locked for changes, and is out to lunch.
There's also a wiki-like revision history that acts as an audit trail of all the work done on a document. Revisions in this report are flagged either by paragraph or section heading (user's choice); the latter could make reading updates on technical and legal documents much easier than it would be otherwise.
Plutext Managing Director Jason Harrop told me that real-time co-editing is technically possible with his platform, but that his research says users want the level of control that the intentional publishing gives them.
Plutext is also going to release a free Java-based editor, Docx4all, that natively supports Word .DOCX files as well as the Plutext system. It's not a pure Web-based editor, but it will allow document authors to send links to active versions of their files to users who don't have Word.
The demo I saw was early and a bit rough; taking a file from standard single-user mode to collaborative looked complicated; Harrop says the system will be cleaner when it ships in October.
Plutext will be available as server-based software for companies that want their documents stored inside their own firewalls; a cloud-based Plutext service may also be forthcoming.