So much for the single feature in Google Docs that was actually better that what was available in Microsoft's Office Web Apps: You can now co-author documents in real time in Word Web App in SkyDrive. This allows multiple people to collaborate together on a single Word document. Here's the word (ahem) from the Office Web Apps blog:

Building on the collaboration features already available in Word 2010 and Word for Mac 2011, co-authoring in the Word Web App on SkyDrive helps you collaborate with others on polished content without having to leave your web browser.  Just sign into SkyDrive and you’re ready to get started!

Our approach to co-authoring in the Word Web App on SkyDrive reflects our team’s deep understanding of how our customers prefer to collaborate and get things done, based on  what you’ve told us and how we’ve observed the use of Office. To help us design co-authoring, we read a lot of your comments, and watched, asked, and listened to how customers said they wanted to work together when working on Office documents. We discovered that expectations change based on the type of document and style of collaboration in play.

Sometimes, people prefer an ad-hoc, brainstorming style of collaboration and want to see others' edits as they type. OneNote is great for this, and that's exactly how collaboration in OneNote has worked, ever since we first shipped it back in 2003. You can collaborate this way in the OneNote Web App, too.

We also learned that most people don’t want others to see their thoughts and edits in a polished document until they’re ready.  At the same time, other contributors to the document want to review and digest changes being made before they react and respond instead of seeing others typing in the document where they're working.

We designed co-authoring in the Word Web App on SkyDrive accordingly:  When you’re co-authoring, you always have a real time view into who is making changes and where these changes are occurring.  As soon as you begin typing, the corresponding section of the document is locked and others are notified, placing you in control and freeing others from distraction.  Contributors can hit “save” at any time to see an updated view of all changes.

All of this works today across the Word Web App on SkyDrive, Word 2010, and Word for Mac 2011, so you can work together and be more productive across the browser, the PC, or the Mac.

More info is available on the Inside Windows Live blog too.