The main difference between the Office Web Apps and the Microsoft Office software is that you run an Office Web App through a Web browser window. Here's how it works: Using your browser, you go to a Web site, start the Web application, open a file, and get to work. Files you work on are, like the Web application itself, stored on the Internet, not on your computer. All tasks are done through a Web browser.
Having your files stored on the Internet means that you can work on files wherever you can connect to the Internet. You don't have to be in your office or your home or even carry your laptop with you. If you can get online, you can get to work. Storing files on the Internet offers another big advantage: You can share and collaborate on files with others.
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Source:http://www.dummies.com/how-to/content/running-the-office-web-apps-through-a-web-browser.html
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