Google Documents (Google Docs) is a must-have for every student! I first discovered it during grad school. It is a great way to save documents that you are working on. You never have to worry about hitting the "Save" button - it automatically saves your document every few seconds.
And what it's super useful for is when you are working on group assignments (esp. papers). You can open up the document through Google Docs and have all your group members view it at the same time. You can all edit it at the same time. What's great is that you can even open up a chat window to the side of the screen and talk about the assignment while you are working it. It makes life so much easier!
It gives me peace of mind when I'm working on any school assignment in general. I will usually start a Word document on my computer and then copy and paste what I have onto Google Docs as well. You can also upload an existing document onto Google Docs anytime - whether it be a word document, presentation, or spreadsheet - I've found the formatting does change a little, though.
As I mentioned, it's definitely good for peace of mind. I recently had a computer virus scare and will be relying a lot on Google Documents from now on (as if I weren't doing that before!). I also got into the habit of emailing documents to myself in sections as I worked on them. I've been doing that for a while, actually, at least since nursing school.
So yes, I highly recommend using Google Docs for all your word processing needs!
Disclaimer: I was not compensated in any way, from anyone, for writing this - just felt like it!