Hi,
Office Live Workspace is a collaborative service that leverages the fact that many PCs already have a world class Office suite installed that can provide a significantly richer user experience than current generation browser based solutions. While other services are trying to create an editor, we are free to focus on enriching the customer experience, knowing that our users can use the tools that they already have and are familiar with.
That doesn't mean that we only support Office and Office documents, however. We have a "Save As" button and an "Upload" button that, together, allow you to use the editor of your choice on the documents of your choice and document versions are preserved. If you do choose to use Office documents, we have made it easier for you by having a one-click "Edit" button. This is not because we want to give Office preferential treatment. Again, we are leveraging the fact that we know how to detect and interact directly with Office XP, 2003, and 2007 if it is installed. Other editors do not support this.
Even on kiosk and locked down environments, there is usually some form of editor available. The exact editor requirements greatly depend on which documents you want to collaborate with. Not all editors need to be installed so even "locked down" systems can potentially be used.
That's not to say that you can't collaborate using just a browser. We do provide Web Note and List editing directly in the browser, not to mention the ability to comment on existing content. SharedView is another option that does not require a client editor while still enabling rich collaboration. Our sharing model is based around email invites.
Please feel free to reply with your thoughts.