Opening local document files in Google Docs

"Upload Office Files to Google Docs From The Right Click Menu might help :

Google Data team today released a new
Windows client that lets you easily
upload multiple documents from the
desktop to your Google Docs account

Files can be uploaded to Google Docs
via the right-click menu or through
the drag-and-drop functionality."

Google has released a Chrome extension for just this. It will open the document in chrome directly in a google docs viewer tab and give you the opportunity to save to your google docs if you chose. Check it out: Docs PDF/PowerPoint Viewer (by Google)