Microsoft's "online" office offering, Office Live Workspaces is now accepting sign-ups for beta testing. I have "online" in quotes because it's not what most of us have come to think of as a conventional online office application… even Microsoft bills it instead as "The Online Companion to Microsoft Office" (italics mine). Instead, it basically provides a file storage and collaboration mechanism for Office-basically, it's hosted Sharepoint, for free.
This may not appropriately be an item for CIOs just yet, because this is a "free" and clearly consumer-oriented offering, probably meant to go head to head with Google Apps, providing the same sort of sharing and collaboration functionality. Of course I say "free" because you have to buy Office first, where Google is truly free all the way around, but I imagine most potential users already have Office in the first place, so at least there is no additional cost.
But in the online marketplace, what is free and in beta testing today is coming to a corporate package near you soon. Microsoft is hard at work on a hosted Exchange offering, and a bundle of that service with this would go head to head with Google's Apps for your Domain (possibly not as aggressively priced; but then, you feel better about something when you spend more money on it, don't you?) Mary Jo Foley asserts that this offering won't be transitioned to compete with Apps for your Domain at all, but instead that another service called "Office Online" (apparently "Live" is too exciting for nervous CIOs) with , Exchange, and Office Communications Services, will be intended to compete in that arena.
Regardless, the entire endeavor is worth keeping an eye on.
CORRECTION: I originally said that this technology did not allow off-line access to files stored remotely; however, I missed the intention to integrate the product with Microsoft's recent acquisition of Groove and their off-line storage capability, so the product should, in fact, make documents available in off-line mode automatically.