UPDATE: Since I wrote this original post in 2011 Microsoft has released the mature ready to go Office365 for the Cloud. And it is a vast improvement and a real game changer.
It has a simpler new layout which works well with tablets, not just Surfaces. I use my Office365 on my iPad and it is great. It also has a wonderful new App Development model which will make it much easier to add SharePoint to the entire Enterprise. Things are just getting better and better from the Cloud.
Office 365 beta is here. And the wait is almost worth it. Almost. First the good news. You get SharePoint and Office Web Applications in a Cloud solution. And this is real SharePoint 2010. You even have the ability to start workflows, edit page layout, set site properties and even open the page in Designer 2010. Everything with the same ribbon and SharePoint 2010 because it is SharePoint 2010.
With a basic under 25 user Office 365 beta you get Outlook Web Application, which looks and feels like the real office. You get a basic web site which frankly is terrible. But the real killer app is, or will be, Cloud based document Management using Office Web Apps and SharePoint 2010 Team Sites!
Frankly for a 25 person of less business Lynch will be useless give Skype and other basic IM services. But the ability to use SharePoint and Outlook in the Cloud is pretty cool.
And I am going to be clear about this: Office 365 beta is not kind of SharePoint 2010, or something that looks like SharePoint 2010; it is SharePoint 2010. This is Microsoft breaking in to the Cloud in a massive way. Good job folks, now get the phone to sell.