By the way, there should be no compatibility issues with Lotus - it should open lotus files and allow you to edit them. Whether or not Lotus will edit new MSOffice files, I'm not so sure. That may require a filter to be downloaded.
My experience on file compatibility is the other way round, while Lotus will open Office files, Office will not touch Lotus files, you have to save as Word or Excel from within Lotus if you want Office to read them.
The entire Office beta is on the disc, so there shouldn't be any large downloads. You do need to be online though, in order to activate the software.
You do not need to have a previous version of Office installed, and here's what Microsoft have to say regarding the limitations...
"When the beta expires on the 1st February, it will become a reduced functionality mode that restricts the options available to you. You are still able to open your documents, but cannot save etc.
You can revert to your previous version of Office when the beta expires, but in order to do so you will need to uninstall the beta and reinstall your previous version. You should uninstall Beta 2 before installing the released version of the software too.
With regard to 2007 file format and previous versions, there is a compatibility pack available that will enable 2000, XP and 2003 to both read and write the new file format. When opening a 2007 file in 2003, certain features are disabled. SmartArt graphics will be displayed fully, but as a picture for instance."
To find out about compatibility with Lotus and other applications, visit the Microsoft Office 2007 Preview site at click here