The new feature is a one-click import feature for attachments in Gmail. The D&S team explained:

"Whenever those of you who use Gmail receive a spreadsheet or a document in an email, you will see a new link next to the "Download" link that says "Open as a Google document." Click on that and the attachment will automatically be imported into Docs & Spreadsheets and added to your personal document list where you can make changes, invite collaborators and search for it later."

"- This feature is only available in Gmail.

- And, at this time it only works with Microsoft Word documents (.doc)."

It also works with Microsoft Excel files (.xls), which the guide clarified in a latter comment.

So, this new feature specifically targets Microsoft Office documents and spreadsheets -- and it only works in Google's email program. If I were a conspiracy theorist, I would be a blindingly obvious one. Yes, Google is making it super easy for users to open up Microsoft's (proprietary) file formats in Google's online version of Word and Excel. In Jay Fortner's excellent SWOT analysis yesterday of Microsoft and the new threat of online office suites, he pointed out that competitors such as Google, Zoho, and AjaxWriter "could build critical mass through the installed base of former Microsoft users." And this, in a tiny but significant way, is what this new integration between Gmail and Google D&S is about. Google is quietly compelling Gmail users to switch from Word and Excel to Google D&S.

Granted, the main flaw in this strategy is that Google has mostly failed to get a large user base in Gmail over the past couple of years, which gives them a smaller pool of potential Microsoft Office converts. Gmail is the least used web email service amongst the Big 3 - Yahoo and MSN email services are far bigger. Imagine if Google had Yahoo Mail's 250-odd million users! Now that would make the webmail/D&S integration a major play...

Miramar Mike points out a slight flaw in the execution too - there's no connection from the imported doc/spreadsheet back to the originating email, so it loses a bit of context (more a missed opportunity than a glaring omission).

Conclusion

I don't want to overstate the importance of this small feature in Gmail and D&S, or use it to proclaim the death of Microsoft Office. The battle between Microsoft and Google for office software market share is deep and complex, as Jay's post and the excellent comments to it show. But this new integration feature is another example of how the desktop and online worlds are being munged together by Google, right under Microsoft's nose and directly threatening MS Office.