How many features will there be?

I bet it’s going to be fairly bare-bones, but according to Gizmodo (previous link) it should compete feature-wise with what’s out there, mainly Google docs, not comparing to full version (Do note that Gizmodo is often speculative about these things). Also, IMO, cloud apps are not for everyone, there are issues of connectivity and security, so many peeps will stay with the local install.
And as mentioned, corporations will stay with local installs, that coupled with the education sector and parts of OEM, make a very large part of their market share. Then they’ll just throw adds on the could apps, and still get their $$.
This is the same reason why MS is not very scared of OS X, Linux, BSD and the like, they won’t make it to most corporate end users terminals. It’s all in the Volume Licensing for them

I still question the basic premise: How many features will there be? It “word” for instance more like actual “word” or “wordpad”?

And all those other questions.

The ambiguity that has existed since October’s announcement as to how this will be delivered may itself have been a bit of a ploy to see what they needed to do.

Thankfully, the apps, which include Word, PowerPoint, Excel and OneNote, will be available to anyone with a Live account, and judging by the (lone) screenshot above, will aim to compete directly, feature-wise, with other companies’ offerings

Note that MS Live is a free service.
The major point to this is, corporations will not be using cloud computing for their office apps, so that part of the market is unaffected. Those who are home users, will either use the web version if they are OK with cloud based apps, or they will purchase a hard copy. Those who prefer to steal their software (like some of us) will be more inclined to just use the web version. I’d imagine that OEM’s will still include either the standard version or a trial version on new PC’s. So they won’t loose much.

http://gizmodo.com/5313285/microsoft-office-2010-web-apps-will-be-free-testing-starts-today

From the Press Release:

How will people receive Office Web applications?

Capossela: We will deliver Office Web applications to consumers through Office Live, which is a consumer service with both ad-funded and subscription offerings. For business customers, we will offer Office Web applications as a hosted subscription service and through existing volume licensing agreements.

So if you don’t mind getting a windows live account and sitting through the ads, it looks like the very basic version will be free. Now this will certainly not have all of the features of Word/Access/Excel/Powerpoint. I would not expect to have a large database and use mailmerge with word, for example. They are very shy about telling you which features are free and which are for pay.

But will it be enough of office so you can do most of the basics, probably so.

Google’s servers are probably much more reliable than MS’s. Gmail/GoogleDocs outages seem to be far fewer than Hotmail and other MS services.

And I would expect them to slowly ratchet down the free parts over time to make people subscribe.

(And in the Dr. DOS days, libel worked too — claiming that it was incompatible with Windows on attempting to load it from within the Dr. DOS environment, even though it was perfectly compatible.)