With their fingers in so many pies Google has, on more than one occasion, threatened the status quo of the internet companies with their web-based applications, and now they're taking it one step further by challenging the two major giants in the industry -Microsoft and Apple- with the announcement of their own operating system.
Chrome OS (not to be confused with Chrome the web browser) is the amalgamation of Google's services that relies entirely on the internet to run, which makes sense as most of us out there spend almost all of our computer time on the web anyways.
With Chrome OS you'll be able to carry out everyday tasks like read news, create/edit documents, listen to music and watch videos, just like what you'd normally do with a Windows or Mac computer. And it's super fast, taking only seconds to load from the time you turn on your computer.
The downside to the OS is that being only a web-based application, it won't support hard drives as all your stuff (i.e. music, movies, documents) will be stored on the internet. On the other hand, you could say that the files will be easily accessible from any computer, though you would need to have access to the web in order to retrieve them.
Though it won't possess the same functionality of Windows 7 or Snow Leopard, and businesses would need to rely on these two operating systems to run their 3rd party programs, Chrome OS will appeal to the majority of people who use computers for web-only reasons and if you think about it, that number is big enough for Microsoft and Apple to take Google's new baby seriously.
Chrome OS is expected to hit netbooks (and maybe tablets) next year.