I've become quite fond of Windows Live Writer, and Holly's even started to use it over on her blog. Writing a post on a web form is convenient, but the whole WYSIWYG editor thing can be tedious at best.
Google makes a good set of products. I use mail, reader, analytics and obviously their search functionality. Every day I use countless more non-Google branded sites (think YouTube right after it was bought). I've tried using Docs, and it gets better seemingly every day.
Lifehacker talks about using Google Docs to publish blog entries. Great idea - the functionality of a word processor to generate content for your website. But as I've pointed out before, Google sits on some of the content, specifically images, whereas some other editors (Live Writer specifically) uploads the images to your blog, either via FTP or HTTP POST (assuming your blogs implementation of XMLRPC is functional).
Drupal adds an interesting twist to the whole thing - it's XMLRPC interface is a bit of Movable Type and a bit of Blogger. Some services (ScribeFire, I think) recognize Drupal as its own service, but then don't really work that well :-/.
Google Docs tells me to call it a Movable Type blog, but I have yet to make the categories work properly.
Which is really too bad. Docs is like Live Writer - except online, and therefore portable.
Maybe one day it'll get squared away. Until then. I'll work with WLW and its nuances and its features that I can't seem to find anywhere else.