There was a slightly hyperbolic BBC article describing Google's Chrome OS announcement. Apart from the obvious significance of the two largest tech behemoths going head to head the BBC did wonder if it would spell the end of the push for Linux on the netbook platform. Of course they didn't actually read the blog post which describes the new Chrome OS architecture being essentially Linux* running a new windowing system designed to support the Chrome browser.
Google's use of Linux as a base shouldn't be surprising. For starters their entire server farm (or is that the "Google Platform") relies on Linux. They used Linux as the basis for their Android Mobile Phone OS. They employ a large number of prominent kernel hackers in the company. Google is very much a Linux company and mighty as they are I think they appreciate that re-writing a kernel is a little like re-inventing the wheel. There are areas that Linux is still a little immature in. It has yet to develop the definitive power management strategy that modern mobile hardware really needs. However Google's involvement can only accelerate work in these directions.
There are some other things worth noting. The push for "Browser as the platform" and "The Cloud" is going to ask some serious questions of the Free Software movement. When you have the freedom to run entirely free (as in libre) software on you hardware it will mean nothing if all your data and applications are proprietary services in the network. There needs to be some serious thought given to the compatibility of Software as a Service with the ideals of computing freedom.
*When I refer to Linux I of course refer to the kernel