Let's face it, Office 2007 has so many features that makes life a lot easier for power users that I do. I find it entering data, tabulating, calculating data in Excel is a lot more handy in 2007 than 2003. Word 2007 makes it so much easier to pull frequently used functions with Ribbon.
About file compatibility, there should not be a problem if people knows how to use "Save-As".
We need to understand that XML will become the "standard" in the computer world, it is so much "cleaner" in terms of usability and comptibility across platforms. Rather than changing fonts, colors and stuff one at a time, why not just "mark" the sections and use "Style", so much easier that way.
Google Doc is only good when you need to work on something small and online, if you are working with pages of text and pictures, and need to pull data from multiple sources, you still need office.