Has Google won the SAAS prize?

There's an article in the Economist this week that paints a convincing picture of outsourcing your email (and Office applications) to Google. The software as a service trend is no longer on the fringe, and with Googles agressive aquisitions they've got to be a real threat not just to Microsoft, but to anyone who is building software as a packaged product.

Do any of you have experience of GMail, salesforce.com or another SAAS, and if so how did it compare to your desktop experience?