The July 24 print edition of the Wall Street Journal (Robert A. Guth's "Is It Time to Dump Your Desktop," page R1) provides an overview of the current state of web-served replacements for typical desktop applications like spreadsheets, word processors, and email.
For any one who has been following this (as I have) the Guth article is quite "thin" but does provide a decent overview.
I do think it mostly misses what I think is potentially the most significant feature of the new software: collaboration features. Writely is a good example of this. You don't just send files around, you work on a single file and can view the contributions different people make. Features like this used to be limited 20 years ago to expensive online editorial processing systems used by large publishers; now you can get similar features from any web-connected computer with a decent browser.
The article also hints at the Google-versus-Microsoft flavor of many discussions of desktop replacements. I have to admit that I'm one who is believes that Microsoft is extremely well positioned to win this battle given its ability to play its resounding "installed base" card. Stranger things have happened, though.