Neat idea. A lot of people are paranoid about this, thinking that Google will own all your data. I’m pretty sure this is not the case. There will be a user partition on your computer (this is even stated in one of the videos). Local storage is part of what allows newer web applications to be fast but still secure your data from floating around in the cloud. Local storage is NOT going away. What they ARE trying to do is allow a quick and easy way to get to any web- or webservice-based applications without all that mucking about with a bloated OS. They’re going for what is essentially a very fast boot-to-browser OS with a few minimal extras.
For computers like netbooks or MIDs where the hardware is not meant for burly games or photoshop or big developer IDEs (or Windows, for that matter) this idea is pretty good… as long as all I want to do is web-browse, run web-based apps, listen to music, watch videos, or chat. That’s all I do on my netbook anyway, so it sounds like win to me. Alternately, as long as you can still boot to it from a normal bios, you could probably dual-boot to another OS.
Chrome OS is beta at this time, mainly for developers to poke at. It should be released some time late next year.
Chromium OS is available at: http://www.chromium.org/chromium-os