One of the many areas in which we've spent time since Beta 2 has been making working with the collapsed Ribbon a more realistic option.
Since the very first public build of the new user interface, you've been able to collapse the Ribbon to just the names of the tabs by using CTRL+F1 or by double-clicking the selected tab. The design goal here was that when you wanted a maximum amount of screen real-estate in which to work with your document, you could get all of the UI out of your way at once. In fact, one of the main advantages to consolidating all of the UI into one place is that you can turn it off or on all at once.
The "collapsed" Ribbon in Excel 2007
In this "collapsed" mode, your document expands to fill virtually the entire available window. One piece which remains on the screen is your customizable Quick Access Toolbar, into which you can put any commands, buttons, or groups of controls you wish.
I often use this mode myself when I'm reading or performing simple formatting on a document; I use the Mini Toolbar and context menus to perform my basic tasks and then bring up the Ribbon when I want to do some more in-depth work.
Anyway, we got a lot of feedback in Beta 2 that the collapsed Ribbon was a great idea in principle, but that it didn't work very well in the real world. So, we dug in and did a number of features designed to make working with the Ribbon collapsed a better experience.
The first thing we did was simply to make collapsing the Ribbon more discoverable. What we used to call unofficially "collapsing" the Ribbon has now officially become "minimizing" the Ribbon. In current builds, you can right-click anywhere in the Ribbon to bring up a context menu which includes an option to "Minimize the Ribbon." This is in addition to CTRL+F1 and double-clicking the selected tab, which are still available.
A context menu item for Minimizing the Ribbon
Another big improvement: Many people have tried to keep the Ribbon minimized but use the keyboard primarily to access functionality.
Unfortunately, in Beta 2 every time you type a KeyTip to use a command in the Ribbon using the keyboard, the Ribbon expands and you have to manually close it every time. This was quite inefficient and basically made it infeasible to work with the Ribbon minimized for any length of time.
We've now done the work so that if you minimize the Ribbon, when you press ALT+H to bring up the Home tab, it comes up over top of your document like a little floating window. Then, when you've pressed the key for the feature you want to use, the Ribbon goes away, reverting back to its minimized state.
I made a little movie to show what this looks like and how it works. I put Excel in some extremely small resolution in order to keep the movie small (I think something like 690x440 or so), but you get the idea of how you might use the Ribbon minimized with the keyboard.
Watch the Minimized Ribbon Movie(Windows Media, 21 seconds, 716 KB)
To un-minimize the Ribbon, you just right-click again and uncheck "Minimize the Ribbon" or press CTRL+F1 or double-click a tab.
Now, read Part 2, where you can see how this same feature works with the mouse. (C'mon, you know you want to watch another movie!)