In a recent review (which, alas, I can't find the reference to, but I read it via Digg) of AJAX office applications, Google's Gmail, Notebook and Spreadsheets received the highest marks.
However, the best of breed word processor was Zoho Writer. Try it out, it's amazingly capable! The main thing I noticed so far, is that it seems to be geared toward producing HTML more than printed pages. Maybe I haven't tried it enough.