The technology is based on ByteTaxi's FolderShare [download], which Microsoft acquired last year. A synchronization tool like this is very useful. I use the original FolderShare to keep two of my own PCs in sync. I've never considered opening up a synced folder to another user, but I can see how it could be a big productivity and communications enhancer for teams working on projects. An advantage of the sync method is that as long as you are online, you can be guaranteed that you have the latest version of the file. Using a centralized shared directory is awkward (people always forget to update it), and e-mailing files back and forth is far too cumbersome.
The new LogMeIn Backup uses similar technology but allows you to use a portion of a friend's hard disk to store your own synchronized files, for offsite backup. (You can set up encryption so that your friend can't access your files.)
Also, BeInSync [download] just updated its file synchronization and sharing utility. I was not impressed with the previous version of the program, since it moved files from where I had them into its own directories (the files moved back when I uninstalled the product). Perhaps the new version is better.
Ultimately you won't care about where your files are located--on your local machine, a server at home or at work, on the Internet somewhere, and so on. There will be multiple copies of your files out there. Tools like FolderShare will make sure that you're always accessing the most up-to-date versions and will take care of updating the other copies when you're done. There are obviously enormous security and privacy issues with this scheme, but storage is clearly moving off the desktop.