The first line in the AppStore on CloudOn's page pretty much explains what it does: "For the first time you can get Microsoft Office on your iPad. Seriously."
And when they say Microsoft Office, they mean, full-fledged, Microsoft Office with all the features. Oh and it's free!
In addition to giving you Microsoft Office on your iPad, CloudOn also seamlessly syncs all your Office documents to the cloud, using your Dropbox account. So any Office document you have in your Dropbox account can now be edited and accessed from your iPad. For free (did I mention that already?).
CloudOn also lets you create new Word, Excel, and PowerPoint documents which are automatically stored, as you work, in your Dropbox account (you can later edit them just like any standard Office document).
I must say I was quite impressed by the quality of this app (and the AppStore reviews about it all seem to be positive too).
For those interested, the way CloudOn works is that the app connect to Microsoft Office that is installed on CloudOn’s servers. So your iPad is actually just the display for what is being processed on the server. That's what lets them give you access to real Microsoft Office, with the same look-and-feel and features.
CloudOn is free (in case you didn't notice yet) and only works on the iPad. It requires a Dropbox account (which is free to create if you don't have one).