Microsoft is planning on replacing that trash version of Microsoft Works that PC buyers are accustomed to seeing on new PC's with Office 2010 Starter Edition on future Windows 7 PC's. Office 2010 Starter Edition will be a limited functionality version of Office supported by the use of advertisements in the program. Microsoft has yet to disclose the nature of these ads, and how they will work/impede normal usage of the programs, but if done correctly it could be a great new selling point for new PC purchases. The full version of Office 2010 will come pre-installed on the PC's, and will need a purchased code to unlock the features and deactivate the ads.
This is similar to what Microsoft tried with Office 2007, but with that attempt they would just give you a limited time demo of Office, after which you had to purchase it to unlock the full version.
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