Don't know if anyone else has been playing with thinkfree office but it's looking very good. It's only in beta at the moment but I'm very impressed.

The online version has 1GB of storage, you can share files and edit Word, Excel and Powerpoint docs, looks like all the document storage and publishing is handled by webdav.

They are soon going to offer a server version that you can install on a local server and give fast local access to the service for your users, I think it would be great to hook into a VLE or use it for e-portfolio work.