I am beginning to really like Google Apps. I can manage e-mail accounts, contact, groups, documents, calendars, and use 200+ other Google app applications. There are a few limitations and I am not happy with support. Enough of the benefits outweigh the downfalls.
Email - you get 10 accounts with 7GB of data each. I don't know of a hosting company that gives you that much space. Usually it is 100MB - 1000MB per account, though they might give you 100 accounts. If you have that kind of business that needs over 10 email accounts, the $50 a year per Google account would most likely be worth it.
Documents - online storage for user and group documents, and with collaboration, need I say more?
Calendar - online calendar for users and groups. I find very few hosting companies that offer that kind of service
Other services - Chat, Contacts, Sites (web sites), project management applications, support services like Assistly (will be introducing Assistly for kcits.com in the near future) and 200+ other services. There seem to be few limitations!
Now the bad part of Google Apps. The number one issue I have is Google doesn't allow the transfer or the consolidation of Google App accounts. Long story short, if you want to consolidate two accounts or domains that have separate accounts, you have to delete all users, and then delete the account, and then wait 5 days to add the domain to your other account. But before you do that, you better have transferred all you info and emails from the account you plan to delete. I have had to do this with two accounts, and it has not been fun. The next issue I have is support for Google Apps is a little lacking. There is a huge online community that asks questions, but support from true Google App support team seems to be lacking. I had to read 5-8 posts to find the one Google article that has one line that states you can not consolidate two accounts, though there is no reason why or if in the future they will offer such a service.
The last little issue I have is multiple domain usage under one account. I would like a little more control, but for now I can live with it.