Google Chrome running within a new windowing system on top of a Linux kernelSo what we're really talking about is a Linux distribution with a new UI X11 interface, like Gnome, KDE and XFCE. I reckon it will be called ChromE to denote it as an environment.
What's important here is that the question, "will Google Chrome OS beat Windows?" should really be, "will Linux with yet another UI beat Windows?". The answer to other questions like "can it run Word?" or "can it run photoshop?" are already answerable as "yes".
The only way this move by Google will push Linux even harder into the home market as an alternative is going to be if they do an OEM deal with the likes of Dell and HP to ship their distribution pre-installed as a purely Internet type OS - like Netbooks.
Importantly though, I think there will be a lot of very disappointed Windows users out there that will download this new Linux distro, install it, and then suddenly get upset when some things won't work - like the very latest bleeding edge peripherals, Nokia phones and or new DirectX games.
That's my two penneth anyway.