First of all we have to configure your Google account from Office. Then, you'll be able to synchronize files and work with other people. It's like that feature implemented by Google Wave, but in Microsoft Office.
Once you'll have configured it, you'll be able to collaborate with your friends.
From now on, you'll be able to create and edit word, excel or powerpoint files with your partners with no problem.
In short, Cloud Connect is a very interesting tool for all those user who usually work with documents and need to work in groups.