Microsoft today announced Microsoft Equipt: a subscription version of Microsoft Office Home and Student Edition (3 users, Word, Excel, PowerPoint, and OneNote), Windows Live OneCare ($49.95 a year) and some free stuff (Windows Live Mail, Windows Live Messenger, Windows Live Photo Gallery, and Office Live Workspace).
In my view, the pricing is expensive if you aren't interested in OneCare. It doesn't appear to be so at first blush: you pay $69.99 a year, while I paid $124.99 for Microsoft Office Home and Student 2007 back in December 2007 (Amazon.com's current price is $109.99). So while at first glance Equipt is cheaper, the gotcha is that you pay $70 each year. (My guess is that the software stops working if you don't continue to pay, but it's hard to tell since Microsoft's Retail Software License Terms web page doesn't list Equipt as an option.) So assuming that I buy Equipt for two years ($140), that's $15 more than the $125 I paid for the one-time Office software license and $30 more than Amazon.com's current price for the one-time software license. In short, if I'm going to use the Office software for more than a year, it's cheaper to buy the software rather than subscribe to it.
If you do want OneCare, that makes the pricing quite attractive, since for $20 more a year you're getting Office Home and Student 2007.
Part of Microsoft's message is that "Microsoft Equipt customers will get the version upgrades as part of their subscriptions." However, since Microsoft's release cycle is so slow (e.g., four years between Office 2003 and 2007), the "you don't need to pay for an upgrade" pitch rings somewhat hollow. If Microsoft released upgrades every six months, it would be a different story, but it doesn't. So if you're a home user of Microsoft Office (and not interested in OneCare), you can pay more by buying Equipt if you want to, but I wouldn't advise it.
[Note: this is an updated post, after Microsoft pointed out to me that OneCare is not free, and so Equipt is quite a deal if you want both Office and OneCare. However, if you've already paid for Norton or Symantec, I still consider Equipt on the pricey side for the Office functionality.]