Office Web Apps: Use the Word Web App
The Word Web App gives you the power to create, view, and edit Word documents on the web, using the tools and interface you already know. Documents you create online work seamlessly with Microsoft Office Word. You can also use the Word Web App to share Word documents online with people who don't have Office installed.
Step 1: Open Office Web Apps
Open Windows Live, and point to Office.
Step 2: Create a new Word doc
Click New Word document.

Word Web App contains familiar commands from the desktop version of Word and includes the Office ribbon.