Google has announced a massive overhaul of Google Docs and it has re-built many features from scratch. The changes include a whole new and fast spreadsheet editor,  document and a new collaborative drawing editor, group-chat functionality and the ability to collaborate with other doc users in real time just like Google Wave. The changes can no be preview here.
sGoogle Docs now looks more like Microsoft word with new features such as spell check, rulers and tab stops but can it replace Microsoft Word? That is the question now. It has to be noted though, that the new features do not support gears which means they are not available in offline mode. Google says that the offline features will be made available soon.