For my test environment, we set apps to open in the client by default (not the browser) so we don't break existing document links in the site collections. You can achieve this by following this procedure.
1. Go to Central Administration and select Site Actions - Site Settings – Site Collection Administration and click on Site Collection Features.
2. Activate the Open Documents in Client Applications by Default feature.
Run the OWA setup
1. Run setup.exe from the root of the OWA installation source, and input your product key.
2. Accept the license agreement and specify an install path and hit Install Now.
When the install finishes, you’ll be prompted to open the Configuration Wizard. Click Next when the Wizard opens and answer yes to the service re-start warning. Let the configuration finish and perform the following steps:
Start the service instances
A service instance provides the physical location for a service application. For each server that you want to run the Office Web Apps service applications; you must start the service instances. You can start the service instances by using SharePoint Central Administration or by using Windows PowerShell.
Procedures in this task will start the service instances on those servers specified. This task must be completed after you have run WCSetup and PSConfig on each server in the farm.
To start the service instances by using Central Administration
1. Click Start, point to All Programs, Microsoft SharePoint 2010 Products, and then SharePoint 2010 Central Administration.
2. On the SharePoint Central Administration home page, in System Settings, click Manage services on this server.
3. On the Services on server:
Now to test.
Upload an Office document into a document library and select the drop down menu:
When you select "Edit in Browser", the web app version of Word will open and you're free to edit your document.