Daniel Eran Dilger nails it:

Google is adding value by stripping away conventional services that a PC normally runs (and which aren’t necessary on a netbook, the idea goes), and building support around HTML5 to enable web apps to do things that a conventional browser hasn’t been able to do before. That includes offline browsing, local thin client style storage on solid state disk, and a stronger security partition around individual web pages, so one tab’s browser exploit can’t impact things happening on another browser tab.

Rather than being anything like Android, Chrome OS is another take on the Palm Pre’s WebOS platform, but for netbooks rather than iPhone killers. Unlike Palm’s new OS, Chrome OS is backed by Google’s vast fortunes and can be implemented by a variety of hardware makers. Or from the opposite perspective, it’s backed by a company with no hardware or consumer platform expertise and set to be deployed across a mess of fractionalized, squabbling competitors two years after the Palm WebOS was first announced.

I do think Dilger is being a little hard on Chrome OS, but overall he is correct. Google could make a Microsoft style mess out of this in a hurry. The irony being, that they are trying to remove Microsoft from that market.