It seems pretty obvious that Apple plans to 'replace' Entourage/Outlook with their Mail.app/iCal/Address Book package. Yes, it still needs work in order to replace that, but it's on a good way, and integration is already there. I'm sure iCal 2 will rock, and Mail.app and Address Book have already come a good way.
Now on to Office.
Keynote ~ PowerPoint
If Apple wants Keynote to be a real competitor, the file format exchange has still to be improved. Also: Keynote needs a bit less bells and whistles and better integration with other applications (why not Word & Excel, but more importantly: with RTF-Import/-Links etc.).
TextEdit (Pro) ~ Word
TextEdit (the one included with Panther) is already a nice little word processing application. It's lacking some 'pro' features - but basically a Pro version of TextEdit for 99$ could replace MS Word for many, many users. Another thing: Nisus Writer Express is quite nice. If it earns Word compatibility through Mac OS X' text handling framework (TextEdit), it's basically there, and there's no actual need for an Apple Document application (as has been rumoured). However, Apple might want to make their own - and maybe has some pretty good ideas.
? ~_Excel
For real Office users, a good Excel replacement must be available, if Apple wants to be able to compete. If they only take what AppleWorks' spreadsheet part can do, that actually won't do, I think. It's good, but not good enough. Well: Apple still has some time. Office 11 for Mac will come, and until then, there's Office v. X.