Update: Someone here sent me some screenshots, so enjoy!
They're saving the best demos for last, and Virtual Ubiquity's word processor application, BuzzWord, looks like an awesome application. It's a web based word processor built using Flex 2. Rich text has always bee a knock for Flash, but these guys have built an app that handles text resizing, embedding assets into the document and making sure fonts are displayed cleanly. Google Docs, eat your heart out.
The biggest things were pagination and typography. Once those were taken care of, they went to the UI. The focus is the document and making sure that the user has full control over the document. He's showing off the graphic capabilities. Embedding an image is smooth and the text wraps perfectly as you resize or move the picture around the document. They've put a lot of time into making document manipulation better. Subtle tweaks like a "skip bullet" for lists and measurement tooltips as you resize assets are great features.
The other important part of BuzzWord is the collaborative spirit. They are going to really make document collaboration key. People can see a read only version of the document, make comments, or make edits. All of this happens on the server so everyone sees the same version of the application. They're also showing an Apollo version of the app. I think this is going to get blogged a lot.