If you analyze google's recent moves you'll probably get the idea where they're heading. Recently the aquired Writely (
www.writely.com) which will be an online word processing service. Combined with services as Google Desktop, Gmail, Google (search), and possibly Google OS based on linux, we're talking about a concept here that will allow for people to work from anywhere without dragging their computers. And the best thing is, the entire deal can be perfecly compact and can fit on a 1gb memory card that you can use virtually anywhere, the rest will reside online (storage is getting extremely cheap).
Downside to this is, 1 centralized location that will contain all your info, not only personal but business too. Which is scary imo.
Microsoft needs to get their heads out of their asses and fire that idiot Balmer that's only doing public fool of himself acting like a 5 year old. I haven't seen anyone using Live.com, the interface isn't appealing to me, it's too corporate.