I have also set up and used a Live Office Space which on my PC allows me to save directly to the web. It allows for checkout of files that a group is collaborating on. It works well as a project management tool.
I praise first because I don't want anyone to mistake what I am about to say as vitriol. Here's what I want Windows Live to do. There are 3 things.
1st and most important.
2nd and nearly as important as ending the rebranding. Here's what I want. Here's how to beat Google docs. Make sure that I can seamlessly integrate all my documents. Something I create on the new Live Web apps should be obviously and immediately available when I get to a computer with Microsoft Office. Documents I create on my computer should be one click to put on my Live Web apps. Integrate the following three tools. Windows Live Mesh, SkyDrive and Live Office Space. I don't want to use three tools but each of these tools is great and would complement each other, just not as separate tools. When you add the WORD features in Live Web apps please give me reviewer tools. Google Docs is great for seeing versions, but terrible for making suggestions. I can change a document but I can't add commentary. Commentary and annotations especially as an educator are more important to me than actually making the corrections. Simple annotations like being able to add comments and show inline changes would be awesome. The features currently in word are fantastic but require that I email documents back and forth. Give me one document that lives online but please give me reviewing tools. Also, don't forget Forms. The Google forms feature will beat you if you don't have it in Windows Live Web Apps. I love being able to collect information from students, parents and participants in conferences and workshops, but oh how much better it would be if I could with one click bring those result into my full featured Microsoft Excel.
Finally, keep up the work on Windows Mobile. I haven't switched away from my Windows Mobile phone for one simple reason. I can edit documents on it. Google Docs don't do it and neither do the Android phones. iPhone don't do it. Windows does. I love it. I personally would love a Windows Live Phone. Meaning one where Windows actually puts their name on the hardware. I don't care if you actually get somebody else to build it. You brand the Xbox. Time to take ownership of some more hardware.