Yes it does sound like they are setting up a "cloud" based service for some iWork apps. I hope they continue to make the standalaone iWork software as well, for those who don't want to use "cloud computing" apps (bandwidth, need to have Internet connection, etc.)
The device may need a game changing name to separate it from other tablets that are soon to appear. Since someone owns, and has heavily protected, the ISLATE name since 2006 with the various worldwide trademark offices and domain registries, it could likely be Apple.
Sounds we ae getting some new revolutionary product(s). Apple does not normally rent this large a venue for just announcing product updates or upgrades.
This smacks of a big deal, like the rumored Apple Tabet, or something of that magnitude!