I never anything short of amazed by the ever increasing quantity and quality of web based applications out there.It's actually pretty much possible to do pretty much all your everyday computing with nothing more on your PC than a decent web browser! Plus your applications (and their state) is available from anywhere. In my mind this represents the advent of home thin computing and is they way things are going (hence Googles obvious interest in this sector!)
Here's my run down of the best I've used so far:
Google Mail (obviously!)
Google Reader - The best RSS aggregator I used. More functionality and usability than Bloglines IMHO and it has a good mobile phone interface.
Meebo - AJAX based IM for Yahoo, AIM, MSN and Jabber.
Zoho - Complete (yes, complete) office suite. It even has things like a project planner and a DB!
BBC iPlayer - Bin your telly!
Facebook - I'd consider this a web app as the functionality is so rich now. There are still a few concerns in my mind around the way Facebook approaches privicy issues (but block Beacon using the AdBlockerPlus plugin for Firefox and you'll be fine!)
Picnik - Previously my favourite online photo editing app until I discovered the next one...
Photoshop express - In beta but already stunning! How do they get so much into a Flash based web app?
Google Maps - Ever useful. Ever entertaining.