The screencast sucks. We know it, and we're in the middle of redoing it. We threw it together quickly because we'd heard from a few people who wanted to demo the service to bosses or co-workers, but thought signing up for a test account was too much effort or "commitment". We want to get people over that activation barrier.
Suppose we had an extremely short video that showed only the live multi-user editing, and ignored the permissions and revision control features. If you were a business with a use for a collaborative editor, would that be compelling enough for you to sign up and try it out?
For people who want "MS Word, online" Google Docs basically has it covered. We don't want all those Word features -- we just want live sharing that isn't painful, which is the one thing GD doesn't manage. I take your point, though, that we're trying too hard to emphasize our own feature list.