Rumors have Office 14 due in 2010, but Microsoft may choose to time its release to coincide with that of Windows 7 later this year. For now Microsoft is expected to unveil details about the next-generation suite before the second half of this year. Even from cursory glances are alpha screenshots, you can tell that they will be giving other office suites a run for their money. Office has been a core component of Microsoft's business for a long time and they certainly don't want to let that go.
In the meantime, Microsoft has kept on beefing up their online productivity suite, which we have no doubt will be integrated further and promoted via its desktop counterparts.