Main emphasis of their website is on collaboration and access from anywhere to your documents. Although Firefox (together with IE) is listed as a supported browser on XP/Vista/MacOS (Linux is not listed), there is a note that some Office Live features require ActiveX. So Office Live is not really a match for Google Docs in portability (quite expectedly).

An update installs some new menu commands into Office XP/2003/2007, which allow working with Office Live from within your local M$ software.

I wonder if there is already an OO extension which allows working with Google Docs – no more wondering, here it is (thanks Paolo!).