DailyTech has a bit more info about Office Web Applications 2010 and Office Mobile 2010. The latter one is designed for smartphones, while Office Web Applications is a free web-based version of Office.
Mobile 2010 offers mobile document viewers that allow just about every smartphone on the market to view Office documents without having to download the files first. Supported platforms include the iPhone and Blackberry devices. The Office Web applications will be available without any cost via the Windows Live portal. The free online products will include Word, Excel, and PowerPoint along with OneNote.
The free Office software will presumably be ad-supported and is intended to help Microsoft fight other free productivity applications like those offered by Google. Google's free online applications have so far been unable to gain significant ground on the Office productivity suite. Microsoft says at launch that there will be about half a billion users who have access to Office Web.