There's another major shortcoming with working on files locally and online -- there's no way to synchronize files or folders. If you have a group of files or folders on your hard disk that you'd like to be synchronized with your files in Office Live Workspace, there's simply no way to do it.
Also confusing is that some documents in Office Live Workspace can be edited online, without using Office. A project schedule, to-do list or contact list can be edited online, but Office documents such as Word, Excel and PowerPoint files can only be edited using the add-in and Microsoft Office. And if you create a contact list online, you can make those contacts available to you locally in Outlook, but you can't make your Outlook contacts available in Office Live Workspace. Go figure.
Despite these problems, there are some nifty little extras on the site. You can comment on any document, for example, and others can read your comments. An add-on lets you share your screen with others. So, for example, if I were running a PowerPoint presentation, others could see that PowerPoint presentation on their screens.
Office Live Workspace requires Windows Vista, Windows XP, Windows Server 2003 or Mac OS 10.2x or better. It works with Internet Explorer 6 or later and Firefox 2 or later. If you want to use it with Microsoft Office, you'll need Microsoft Office XP, Office 2003 or Office 2007.
The bottom line
Office Live Workspace is a solid first attempt at an online collaboration tool for small businesses, family and friends, and workgroups. It's exceedingly easy to build customized workspaces and for groups to collaborate on documents together. It's cleanly designed, intelligently laid out and generally straightforward to use.
Although it's an impressive first cut at a collaboration tool, it has plenty of rough edges. You can't upload multiple documents. There's no automatic synchronization between a local PC and online workspaces. And it's exceedingly confusing to know whether you're working on local or online files.
In addition, Microsoft has a good deal of work to do to clear up the considerable amount of confusion about its Live brand. What "Live" means is unclear, because under the same umbrella you'll find client-based software such as the Windows Live OneCare suite, as well as a variety of Internet-based services such as Office Live Workspace. Worse still, there are multiple "Office Live" brands as well, including Microsoft Office Live Small Business, Microsoft Office Live Basics, Microsoft Office Live Essentials, Microsoft Office Live Premium and now Microsoft Office Live Workspace.
Still, anyone who wants to collaborate with others, or who wants access to important documents from any Internet-connected PC, will want to give the site a whirl. Given that it's free -- at least for now -- there's little reason not to try it out.