Office Starter 2010 is the Microsoft-designated replacement for its Microsoft Works product. Starter will be a low-end, free (but ad-supported) bundle of Word and Excel.
Based on a Microsoft FAQ(see below), Microsoft Office Starter will not support all formats, it will also be ad-supported. So in the end, its not that much better than what they are replacing… I mean I guess if you are used to Word and Excel, everything will look familiar to you. I haven’t seen the product in action, so I cannot tell you if the Ads are obtrusive or subtle, my guess is obtrusive.
Q: There is a file I can open in Excel or Word that I cannot open in Excel Starter or Word Starter, why?
A: Excel Starter and Word Starter do not support exactly the same file sets. The following file types cannot be opened in Office Starter: .xla, .xlam, .dsn, .mde, .accde, .odc, and .udl.
Also, add-ins and macros are only marginally supported in Office Starter 2010. According to Microsoft, Office Starter does not support add-ins and will not load them. From the FAQ:
Q: Files have macros, but they cannot be run in Excel Starter or Word Starter, why?
A: Office Starter does not support the creation, editing, or running of macros. However, if a document with a macro is opened in Starter, the macro remains as part of the file.
Another often-glossed-over point regarding Office Starter is how it will be made available. It will be an OEM-only product and not available for download. Again, from the Microsoft FAQ:
Q: How will I be able to get the released version of Office Starter?
A: Office Starter will only be available as pre-loaded software on select new PCs pre-loaded with the Office suites.
If you really need the whole suite of Office Products, look into Open Office, it has almost all of the functions of Office 2007 Premium, it just takes some getting used to, but if you can save 600$, time to start downloading and read up on the product.