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You can watch Ballmer’s remarks from the Web 2.0 conference in full video form here, where he discourses on everything from Microsoft’s aborted Yahoo! buy (“Sometimes, you’re lucky.”) to his bad experiences with Google Android smartphones (“You don’t need to be a computer scientist to use a Windows Phone. I think you do to use an Android phone.”).

But on the subject of the cloud, Ballmer’s most widely circulated quote is one that’s almost certainly going to come back to haunt him:

It’s certainly keeping on-message with Microsoft’s spin from this past summer’s BUILD event — Microsoft’s whole angle is that everybody underestimates the company in the cloud, but it is the secret kings of the SaaS market, thanks to the Office brand’s long history and user familiarity. And no doubt, the Microsoft Office 365 cloud channel is strong, with partners signing on to provide deployment and value-added services all the time.

The punchline to Ballmer’s statement is that earlier in the conference, Google co-founder Sergey Brin polled the Web 2.0 audience on who was using something other than Google Apps for e-mail, and (supposedly) only two hands went up. It seems that while Office 365 may be doing fairly well for itself, Ballmer’s confidence in Microsoft’s total domination of the market may be premature.