Google Docs offers a lot of features, but the interface is sparse and I often find it a bit confusing. No feature changes made over years of this. I get the feeling Google can't bring itself to spend money to improve it or kill it. And the documents begin to be unworkable after about 1000 words or so.
Office Live has less features but a better UI. Live only runs on XP and Vista Windows machines running standard browsers. I could not test on a Mac but it did not work on any of my Linux machines and did not work properly on my Windows 2000 machine.
The use of the Office client has positives and negatives. Negatives is that you have to have Office 2003 or later. Positive is you can build rich complex and large files. So I guess the positive is that it works, whereas Google Docs poor performance on larger files means it does not work.
