The Google Docs is a free Cloud-based set of applications that allows for edition of Text Documents, Spreadsheets, Presentations, Drawings and Forms (to email or put in your website).
It allows for creation of a new document or upload of an existing one, supporting several formats, like MS Office and OpenOffice, and converting them into their format. Although Google Docs doesn't allow for offline edition, being this one off the main disadvantages, the Google's bet in Document edition is very good for documents that are edited by several people or that are edited in several places. Docs allows for 50 people being editing the same document at the same time, even including a chat for people to discuss. Also, you don't even have to save, since Docs is continually saving your progress, pretty much like the blogger does. Also, the Google Docs gains some points by including in the Android Market a free app.
Strong Text Processor
The Docs text processor is probably the most evolved application of the set. It has very simple interface and Google has introduced a new look that I think it's even better.
Of course, It has some limited features like the predefined number of fonts and font-sizes, but overall its a very simple and good text processor.
Updated Spreadsheets Editor
The Google's Spreadsheets Editor is also very good. With a good part of the features that the MS's alternative and has already with a VBA-like scripting system (although not as evolved), with the possibility of upload your own scripts to a user-library.
Also, from what I've seen on the web, this editor is updated pretty often, so each time that you edit your document, there may be a new feature.
I think that google's bet isn't as strong as Microsoft's one, but it's evolving fast.
Not Bad Presentation Editor
Google's PowerPoint isn't as strong as the other two, but is not half-bad. beside not having those animations between slides, that help us make presentation a little less boring, This presentation editor has a very simple and direct interface, and has some cool features, like the integrated YouTube search, that makes putting an video in a presentation much easier. Even being a little short on features, this editor makes presentable presentations and it's very simple.
On a overall performance, I think that Google Docs is an excellent free option for people with a permanent internet connection, and it's the best option for who as to work it various computers and as to share a document with various people, even having less features then other editor.
Feel free to add, correct ot comment the review (be nice, its my first review ;))