Google released Chromium OS project. In another year they promise initial release!
Primarily it is a Linux OS with custom firmware and a single application which is a custom Chrome browser!! All other applications are within the browser, accessed through a URL. So, in essence, you access any website that works under Chrome and you can mark that as an "application" or just browse as you do. Of course, some neat enhancements are done to Chrome browser (which is the container for all apps) to support windows, windows groups, etc.
Unfortunately "all" data will be in the cloud. I am not sure I like that fully. I think if they want to be successful, they should also support some local storage (USB, SD Card, etc.). Most productivity data can be in the cloud. But, not supporting any local storage may not be a good strategy.
Google promises that the boot time (they call Fast Boot!) will be about 3 secs!!! Devices that are specialized (netbooks, kiosks, etc.) could really come alive using a light weight, fast, and secure OS that can seamlessly integrate to the web.
I still wonder why Google is trying to develop 2 separate OS though. Why not use Android for larger screen devices? It has all the necessary elements such as a nice touch enabled UI, productivity apps, full SDK, a clean security model, all kinds of network connectivity, built-in browser, and more. Android is also based on Linux. Why not simply make Android run on an x86 machine with larger screen resolutions? Why another OS?
I would love to see Android running on a cheap Atom based machine that costs less than $200 with a 12" screen that can be fixed onto my fridge that can call, keep track of notes, reminders, manage contacts, and everything else including custom apps!
Check out the demo video http://www.youtube.com/watch?v=ANMrzw7JFzA and track its progress on their home page at http://www.chromium.org/chromium-os.