"Though there is no indication that anything like this is in the works, one can easily imagine a streamlined Google OS on its own hard disk partition, separated from the entertainment, gaming, and media production environments. In addition to Google's signature services—a high-powered internet, media, and local disk search engine—it would likely consist of an office suite, a lean web browser, and various other applications and utilities. (...)
Let's say they go even further: Google gives you, say, 1000GB on their servers, hosts all your data (with multiple levels of permissions), and provides everything mentioned above, and extends their video search (currently in beta) to provide access to a wealth of streaming audio (like iTunes radio) and video. All of it is free, all of it is easily accessible through a powerful, extensible web browser, and all of it simple and easy to use (it's still Google, remember). What are the implications of such a system? First, no more purchasing software (at least not the consumer grade applications hosted on the server); second, companies actually competing for your business (Google would surely be followed by the other major players); third, your work is finally mobile."
More: A Google OS by 2010?
32 minutes ago