I need to act as "product manager" for a web-based ASP product. 
Specifically, I am being asked to scope the next version of the
software, listing the features needed, and then laying it out in some
kind of cohesive format for our software engineers / HTML developers
to build.  I have already determined the "feature set" for the next
version, so I am much more interested in the "execution" part of
product management.  I work remotely, so I need to find some agreed
upon format to communicate the features / layout, and have been using
Microsoft Excel to-date, but find it unwieldy.  Is there a better way
to do this?  Please suggest a few other software programs I might use,
with pros and cons of each.  Freeware/opensource suggestions would be
a bonus.  If Excel is the best way to do this in your opinion, please
suggest a potential format (names of columns or rows) to do this.

Also, I am interested in a list of sofware product management "best
practices" as well as typical "pitfalls." (Please give five of each.)

Many thanks and tips for great answers.

A picture is worth a thousand words they say - I have found that this
stage some sort of visual prototyping tool works best. Some folks use
an actual website development tool like dreamweaver or homesite to do
this. Another tool I tried out which is made for prototyping is called
Ubiquity RP ( http://www.axure.com/ ). Not real powerful but you can
slap together an annotated visual prototype of a web app very quickly
which can then be a reference point for team members to settle on the
finer points. It spits out both HTML and a Word document.

On software project management best practices, my personal opinion is
that Software Project Survival Guide (
http://www.stevemcconnell.com/sg.htm )is the most essential book on
the subject for someone in your position.

Thanks mrlunch - will check those resources out.