Finally google is threatening microsoft with its new initiative to launch a brand new OS or rather a totally new perspective on the term OS itself. The new Google chrome OS will run on a new windowing system on top of Linux kernel.
And Google has taken the web browser to another level by announcing the new OS. Let me put things into perspective, when a new computer is built the manufacturer installs a OS like windows,Linux,Solaris or Mac, then we install the softwares on top of it. But now Google wants to replace the OS with a browser thats right , a web browser something like your google chrome browser or internet Explorer or firefox. When you switch on your computer, it will run a Google Chrome Browser and everything else will run within it. But then Google chrome's interface will more or less resemble current OS's for the sake of familiarity.
And all your (web) applications will run within the web browser aka new Google chrome os. So all these applications will be written by web developers and they will run in your computer just like your current Desktop applications. Though there are many things a web application is not allowed do in present OS context, you never know where the new lines will be drawn on the Google OS.
And the advantages ? web applications can run within any browser , so even Windows users can use these apps through IE or Firefox or the Mac users through safari. So it will encourage developers to crank their brains, after all their applications have a chance of wider adaptions compared to current set of Desktop applications.