While Google acquires Writely, Microsoft works on the new Office 2007. Today at the CeBIT conference in Germany, they revealed the new visuals for the Office 2007 user interface.
Microsoft does a better job at organizing the interface, but it still feels cluttered. They use contextual tabs instead of menus, and the toolbars are really big and combine images with lists and buttons.
I really like the new Office button that provides access to all of the document and system-level functionality in the program.
You can find more screenshots at Jensen Harris' blog.