I use googledocs. The concept is great where collaberation is preferable, particularly if the other folks are familiar with googledocs.. I don't use it as often as I would if if did not require gmail. At least the way I use it requires me to pay attention to my gmail, something I don't do too often. Nothing wrong with gmail, except that I started with pop3 using seamonkey and am reluctant to change. I also like googlecalendar, which seems based on the same concept. And googledesktop is GREAT for finding stuff on the hard drive.
One problem with googledocs is keeping track of files. With a lot of them it can get confusing. And I have security concerns that I am slowly getting over.
We normally use lyx or, when we get word docs sent to us, Symphony. However, as google doc's formatting machine continues to improve, we find ourselves using it a more and more, especially when we get word documents or when collaboration is advisable.