This is honestly the only reason I ever fire up Word anymore. Mail merge is one of those incredibly powerful tools that can be used to present data in really useful ways, not just make up labels or envelopes. Data dumps come to us in all shapes and sizes and the easy, readily available tools in Word and Excel for dealing with these data make them an essential part of every secretary's and power user's toolkit.
I know that Google Apps isn't designed to replace a full-blown office suite, especially for power users. However, Google has made it abundantly clear that they want to displace Office in many business settings. Google also provides us with easy online form/data collection facilities and site-builder tools that are integrated into Apps. This is the perfect opportunity, then to take the old-school mail merge to the next level, dynamically generating documents and web pages based on changing data stored and collected in Google Spreadsheets.
Creating a dynamic, data-driven website isn't a particularly easy thing to do for the average user. Imagine, though, if it were as easy as dragging and dropping fields from an online spreadsheet into a Google Sites page. Or a Google Doc, for that matter. Or a series of emails based on records in a data store. This strikes me as something that Google could do without an extraordinary amount of difficulty. What is search but the ordered display of data?
It is also the only real reason that I keep Office installed on my computer. It's an opportunity to revolutionize the mail merge that has been a part of various office suites for many years, changing the focus from creating mailings that no one uses anyway to presenting data in logical and ordered ways. Spreadsheets tend not to be useful as presentation tools; data merged into aesthetically pleasing and text/graphics-rich documents are not only useful, but an expectation in an age where data must be distilled to usable, actionable information.