Hosted Exchange Office 365 Microsoft Cloud etc

-----BEGIN PGP SIGNATURE-----
Version: GnuPG/MacGPG2 v2.0.18 (Darwin)

iQEcBAEBAgAGBQJQLcGGAAoJEL3WFiTyDenQgSYH/ihpJwVDImz2GhUZxrOBuJMs
Zr7Fbd/etLelUa8cN3RNPFQxRk82NYs/gux+Wzbldxiah76+BKudJUEXW7NZDeGS
5YBRJlkKJ50Sj708oPCDgvLfSWxp/qwCdEWGIlFT/RvDANnm2hmB3oVtX9xChiZA
Vzyc7p8KcL9Fny3NA3RFUaxslMnHaI+fCYt9hTElGDCV2wfGnml3gUONoO/tCl37
xYgf0thQDsIkU5HmATI2+ibPB6hAfVgIKAtHmJg7CD7JIX8JVQtTsR1ck1M6DkXv
jmD3t9oEL6l6Pqo+czc0y2OQTbnzNc7Red1AsrcOTAnBk0D03drcTbjnPG8BpBM=
=8Uty
-----END PGP SIGNATURE-----

What do you mean...If i use telstra's exchange online...i wont be able to use office 2007 installed on the laptop?

No. This is the confusion Microsoft caused by naming the product Office 365. It's easier if you ignore the Office in that name, because it (for the most part) doesn't mean Microsoft Office desktop software.

Office 365 is a bundle of hosted Exchange, hosted SharePoint and hosted Lync.

There are two levels of Office 365, Professional and Enterprise. The P1 Professional/Small Business plan is basically a hosted Exchange account with the SharePoint and Lync hosting thrown is as freebies.
http://www.telstra.com.au/business-enterprise/business-products/t-suite-software/microsoft-office-365/index.htm?tc=G|B|D|TBP|tsute|Office365#tab-professional

As you can see, Telstra charge $7.10/mth for just hosted Exchange, or $7.90/mth for hosted Exchange, SharePoint and Lync, which they call Office 365.

The Enterprise plans are more expensive and include more features, like larger mailboxes or archiving.
http://www.microsoft.com/en-au/office365/enterprise-solutions/enterprise-plans.aspx
Only one of these plans, E3, includes an actual desktop Office Professional Plus 2010 license. All the rest are hosted services only.

The other reason people get confused is that the hosted SharePoint in Office 365 does include Office Web Apps. That's the ability to edit Word and Excel documents that you have uploaded to SharePoint using a browser-based Word or Excel editor built into Sharepoint. It's a useful tool if you're in a Qantas club lounge and just need to make a few changes to a document on a shared computer, but it's not something that was ever designed to replace the desktop Office apps on your PC.

So to answer your original question, yes you can use your existing copy of Outlook 2007 to access your email on either the $7.10 Hosted Exchange or the $7.90 Office 365 products. The Exchange mailbox component works exactly the same way in both those products. They also both include OWA webmail for when you're using someone else's computer, and EAS support for getting your mail on your smartphone.

Hope that helps :)