The Office Live Workspace Beta gives you the ability to create collaboration workspaces. You don't have MOSS 2007 DM yet, but it provides basic collaboration from WSS 2 and WSS 3 is a nice user friendly UI.
And the killer app is, it connects to Office 2003 and 2007. You can edit your word documents in word on your computer and manage them in the Cloud.
Saving still has some security problems. If y0u have ever run SharePoint without Active Directory you will be familiar with what Security is like in Office Live. I don't know if people will find this confusing. Microsoft needs to improve Cloud Security, the process is much more seamless in Google Docs.
Having to log-in via Office when you are already logged in via Office Live in a browser is a problem that Microsoft, who owns Windows anyways needs to get around. The problem here is key security, if the browser could launch an app that could then contact a web service it better be secured very well.
http://workspace.office.live.com/
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