There is an add-on module for SharePoint 2010 called Office Web Applications. Office Web Applications allows people to edit Office documents (Word, Excel, PowerPoint, OneNote) within the web browser window rather than opening the document in the associated Office application.
The advantages of Office Web Applications include:
However, there are some significant disadvantages:
Primarily because of the licencing difficulties, Office Web Applications is not offered to the campus community for the initial deployment. We are exploring whether it is possible to configure SharePoint 2010 to contain site collections which are restricted to those on the Microsoft Campus Agreement with Office Web Applications available and other site collections without Office Web Applications open to any university employees or students. If a way to overcome the license costs proves to be possible, and demand for the application is evident, Office Web Applications may be offered in the future.
For a list of the features that are missing in Office Web Apps, see: