Check this out. Zoho’s office writing app now has online/offline capability, utilising Google gears (which isn’t yet live on google docs – perhaps due in part to the recent Google pushed Star Office offering).
The offline part is read only at the moment but full read/write functionality should come sometime in the next few weeks.
There’ a video demo here.
I’m not second guessing Google but their dual thrust position of a separate online and offline office productivity solution seems kind of klunky. I assume they’ll have a good plan to roll it all in together along with Google gears to provide full two way online/offline functionality.