First it was Docs & Spreadsheets, now Google is once again cooking up some interesting things that reach beyond the search universe . Check out http://code.google.com/apis/gears/ for an overview of their latest offering.
It's a great concept, if late to the party. In their case, that might not matter. We saw this before with Java, we see it currently with Ajax and we'll see it again tomorrow with another challenger. Everyone wants a piece of the desktop pie and there will be no end of challengers.
Don't get me wrong, I don't think the PC is the end-all, be-all, but I recognize clearly that corporations want stable, feature-rich, controlled applications that can be delivered by inexpensive resources. Many of the initiatives in the last few years have forgotten that businesses run by different rules than individuals. What you put up with and is important to you personally is not acceptable and irrelevant to a business. In many cases, the very things you desire for yourself are things that businesses are willing to spend money to ensure you can't have.
In any case, I think this new conglomeration of half-baked technologies has true potential and will be a significant force if it can gain even a small foothold.