Contextual spell check is an example of one of these powerful features. I learned about this at this year's Bett conference in London from Mark Allen at his Google Apps presentation.
If you type into a Google Doc "Icland is an Icland".
If right-click on the first icland I get
If I right click on the second I get
The spell checker understands the context and that the same mis-spelt word is likely to mean Iceland in the first instance and island in the second instance. Very clever indeed!