Writely has had great features from day 1: import and export into Word format, embedded images, a wysiwyg editor, drag and drop functionality, sharing with others, and tagging of documents.
I don't see what the big deal about Writely.com is. The idea of web apps is that all you need to run them is an internet connection and a web browser. But you can't do that with Writely.com. It does not work in Safari. Until it works in all browsers, you are limited to a computer with either firefox/IE. Might as well use a real word processor!