The offline functionality was built on Google Gears, an open source project launched by Google in May 2007. Users will need to install a browser plugin to take advantage of the functionality. After that, an option will appear in the navigation bar to “Go Offline.” The feature works with Internet Explorer v.6 and higher, and with Firefox (including Mac) v1.5 and higher.
For now they are offering read-only functionality offline. Read-write functionality will appear in 3-4 weeks, the company says. Zoho will also begin to roll out offline functionality for their spreadsheet, presentation and other applications in the coming weaks.
Zoho, which competes head-on with Google Docs & Spreadsheets, managed to launch offline functionality on their product before Google did. The fact that they are using Google software to do this makes the story somewhat ironic.
An overview video of the feature is below.