Office 365 is the online version. There's also Office 2013, which has a subscription version of office. Leo suggests getting the Office 365 Home Premium version. It comes with an hour of free Skype calls a month, and can be installed on up to five computers for $100.
What about updating to Windows 8? Will Microsoft extend the $40 offer to upgrade? Leo thinks so, but there's no guarantees. They will probably take it right up to the 11th hour before they do. According to the WinSupersite, he could buy the electronic upgrade now and just wait to install it. He has until October 2015 to do so.