I'm seeing some very smart people miss key pieces of the announcement and then go haring off in the wrong direction... my conclusion is that there's just too much new information in the Live announcement and related commentary for people to handle.
Ross Mayfield bags on MS Office vs. Google Office but apparently completely misses Mojo, the collaborative document creation infrastructure (Niall Kennedy nails this), and then concludes:
Jerry Michalski said something brilliantly simple the other week at a collaboration conference. That we are certainly not waiting for Vista, we have lost trust in these guys and it's time to get these things out of the OS.
So - remember, Live != OS, Services != OS - except perhaps metaphorically. Vista is the OS but this set of announcements is about Live Services, rapid revs, and open APIs.
Similarly, we should probably have a new class of logical error like ad hominem - perhaps ad demonstrandum(?) - to cover the hundreds of blogs that point out that the launch was too early, and the demo broke, therefore Office Live and future Live properties are DOA. Not even worth linking to - even when I was competing with Microsoft this would not have been worth focusing on... also known as aggressively missing the point. Microsoft is coming into the services age - and that includes the much hyped "Web 2.0" areas evoked by the Live announcement and the whole software value shift represented by Service-based computing.