I prettymuch use Gmail exclusively for email these days and now Google Calendar for scheduling, reminders, and class organization. I was using Writely (now owned by Google), an online word processor, to write simple documents...but I've since discovered that ZohoWriter is about ten thousand times better. Too aggregate RSS feeds from all my favorite news and general-awesomeness websites, I use Bloglines, and for blogging on Pegritz.com I, of course, use WordPress. All my web bookmarks are stored on good ol' Del.icio.us, and I use Backpack to manage to-do lists and organize my daily workload. I just discovered, too, that there's even an online spreadsheet editor recently: ZohoSheet--whose functionality is pretty limited, but considering I don't use spreadsheets for numerical operations but for tabular management of data (for example: class grades), it still does all I need it to do. There are, apparently, even a few different basic online presentation/slideshow apps like ThumbStacks, but I haven't tried any of them out because...well, I have no use for presentations. If anyone does, though, try 'em out and let me know what you think!
Seriously...I have no real need for Microsoft Office anymore. If Office 2006/2007/12/whatever-it's-called ever comes out, I probably won't even need to upgrade to it. The most popular office alternatives are freeware, open-source apps like OpenOffice, but OpenOffice is bloated, slow, and next to useless. All of the web apps I have listed are 100% free, too, and--best of all--can be accessed anywhere.
But, wait...what's the big deal, Pegritz? A word processor is a word processor no matter how you look at it, right? Well, true. But check it out: Microsoft Word is a memory-hog and it is stuffed with features that I, personally, NEVER use. ZohoWriter offers me only that which I use, and it takes only a few seconds to log in to and load up in Firefox or IE7. Best of all, ZohoWriter is accessible from any machine with a 'Net connection. My laptop has been dead for months, but when I'm out of town visiting friends in Pittsburgh or elsewhere, I can always borrow some time on a computer and get my work done nonetheless. All of the documents that I am working on in ZohoWriter are stored in my account on their remote servers, so I can access them from anywhere. Web apps give me the ability to get to my files, my calendars, and all the other stuff I use to organize my ridiculously-complicated life no matter where the hell I am. Plus, if my laptop dies while I'm working on them...I don't lose the files because they're stored remotely. All for free.
Now, obviously, there are certain concerns that come up when considering web apps. Security is probably the most obvious. All of the sites I use require logins, of course, and many of them (the Google ones, in particular) ause HTTPS as a transmission protocol to secure data. Storing information on remote sites is an issue, too. But what do I have stored Out There? Stories, to-do lists, student grades, and dr's appointment schedules. Nothing sensitive like, say, password lists or anything like that. Use some common sense, people: if you've got information of a sensitive nature that you don't want getting out of your sight, store it locally on your HD, or encrupt the hell out of it. I'm not worried about the first draft of "Onomatopoeia" or "Mortivorti" getting into the wrong hands, and if someone were to hack my grade files and change their grades to all A's...well, I'd notice it quite easily and bust their asses accordingly. Every site whose services I use guarantees security and privacy of files, but don't ever take that for granted: make sure you always read the security and privacy information that a site provides before signing up for them. If they don't seem trustworthy, avoid them. But just think first.
Also, another concern is: what if your computer loses net access, or you can't get a connection? Can't very well access your remote files then, can you? SO KEEP LOCAL BACKUPS. It's very easy to do: ZohoWriter, for instance, allows you to export documents in a variety of formats (MS Word and .txt or .rtf being the most obvious) and will even send them to you via email. Or, you can just cut-n'-paste (which is what I usually do). Just always keep local backups of your files, too. That way, if Google Calendar is down for a day or something happens to the info on their server, you still have it on your HD in some convenient, easily-accessed format.
But, all in all, I've been finding web-apps to be a lot more useful than local apps lately. I can keep all of them grouped together as tabs in a single Firefox window, so I don't have a thousand damned programs eating up my memory and taskbar space. Yes, each app still demands a certain amount of memory nonetheless, yet I've found managing a few Firefox windows collectively eating up about 200mb of memory (this is counting all the hundreds of news pages, porn sites, and music sites I have open as well) to be a lot easier than managing a few hundred other windows and processes. Furthermore, I just like the idea of web-apps: they are, ultimately, OS-independent, and can be accessed by anyone using a web browser*, regardless of whether they're working on a Windows box, a Mac, or a Linux server.
*Unless you're using some goofy fifth-column browser like Safari (ugh) or Opera...but who in their right mind uses those pieces of crap, anyway?