The beginning of the screencast made me think, about the "folders as you would expect on your desktop": actually a lot of people don't really understand folders and files. They just press "save" in word, which then uses the first few words of the document as filename. If the document disappers from "recent documents" in words, these users have trouble recovering their documents... Just a thought - it definitely seems to be more targeted at cooperations, on the other hand, maybe a lot of users would benefit from an iTunes/GMail way of organising the documents (ie just keep them in a flat list and tag them)?
Versioning documents is another thing that people have lots of trouble with, so versionate definitely offers something new and worthwhile in that respect.