
Fun graphic!
Google's putative OS is in all reality a misnomer. It's like calling OLPC's Sugar or LiteStep an OS - it's really just a veneer or access point, a UI for the underlying OS. Google's stated that the underlying OS will in fact be Linux, although which kernel and flavor I've not heard yet.
From what I gather, they're intending to make a front-end that will directly interface with Google's broad suite of online applications (Google Docs, Gmail, etc...). In truth, operating systems already exist making use of these features,
gOS as an example. Anyone could setup a linux-based Google "OS" netbook by installing the AWN dock and adding Chrome and the appropriate shortcuts. Linux already integrates a program that applies application windows to individual web-pages to make them more "application-like."
The only competitive advantage Google's "OS" may have over existing commercial operating systems (Windows, OS X) is the cost and the fact that Google's online applications already have a decent amount of net penetrance. (I believe there are more registered users of Google Documents suite than there are of Apple's iWork/Pages/Numbers/Keynote Suite - but don't quote me on that). In short, I don't think GoogleOS will bite off more than an ant's share of the monolithic Microsoft market share.
Still, I like Google. They've been good to me very early on when I got to beta-test Gmail and Google Docs. I like the fact that they make all of their products very interoperable. They are a model of open-standards, employing excellent and FREE developer APIs that encourage mashups of their technologies with other web-apps. Google Maps is one such example - it's maps are embedded everywhere. With Google Gears comes the ability to take data (Google RSS feeds, Google Documents, etc...) offline while retaining synchronization with the appropriate online servers. I look forward to see what they come up with in the future.