Last week, Google announced that they were developing an OS, originally targeted toward netbooks. I think it is a great idea. If there is one lesson that our cell phones are teaching us is that we want Internet connectivity, video and audio on our devices, and that we pay a huge tax in performance and weight to when we use laptops and desktops and conventional operating systems like Windows (or even to a certain extent MacOS X and Linux). We should expect that our computers are available and immediate. We should expect that our computers are secure from viruses and spam. And we should suspect that the cost of our software (and associated maintenance) aren't a huge fraction of the total cost of our computing systems.
It's hard for me to see how Microsoft's product plan is working to address these kinds of concerns. Windows 7 seems to be the the natural evolution of Microsoft's "one size fits all" product strategy, with the pricing to match. Google has the opportunity to change the game with a disruptive technology. I'll be interested in seeing what happens when more details become available.