At this point, Google Doc formats are not available offline, but PDFs, Microsoft Office documents and image files – basically, all non-Google Doc formats – are available offline.
Interesting. Seems Google’s play right now is less about ingratiating us to the use of Google Docs and more about simply elbowing in on the file storage space.
For those who have access to the internet all the time, this is not a problem. And, insofar as Google is, at its most basic, built on the assumption of being online (after all, one can't search the internet if one is not connected to the internet), this is not a fault, per se.
However, given it is muscling in on incumbents such as Dropbox, Box.net, and others, who are most adept at handling users' documents, both off- and on-line, Google Drive enters the fray somewhat neutral - ahead, in terms of its integration with Google heavy weights such as Gmail and the entire Google ecosystem; yet behind, in its off-line format limitations.
One nifty thing I did was pop out a gmail, save it as a Google Doc, and convert to a Word document for offline reading. That was nifty, but that extra step of having to convert to some other format in order to view/edit it offline was not elegant and just isn't going to be a sustainable approach.
Dropbox killer? Not yet.