Since this is the hot topic of the day, and I too was curious about this OS, I decided to give it a shot.
So I downloaded that torrent that everyone seems to download, and attached the virtual disk to a VM under VirtualBox.
My feelings about this OS are mixed. It seems to accomplish its main goal: an OS which is capable of running a browser, and nothing but the browser. The browser is good (Chrome), and renders sites with flash and other complexities correctly. But Hebrew isn't rendered well, or even not at all. This would become a major drawback if I want to further test it, because I read mail and RSS feeds in Hebrew, and without those, the OS isn't useful at all.
The jail-ing mechanism of the OS works as expected. Although I did only a very short test, it seems to be impossible to break the jail. This is great in terms of security. But then again, if I had root access to the OS, I could've installed Hebrew support...
My bet is that soon more security researchers will dig for Chrome (the browser) bugs, and utilize it to gain local access (for whatever it's worth, as the OS isn't intended to run from a HDD).
While I agree that some netbooks users are using netbooks purely for browsing the web, I don't think Google has any advantage over the competitors. It is possible to create a stripped down disto of Linux that does just that (hey, that's what ChromeOS is all about), and I bet someone at Microsoft is playing with creating a stripped down version of Windows that does exactly the same. Boot time in both cases can be reduced considerably, and a security jail can be created as well. The advantage of such solution will be the support for a wider range of hardware and maybe even local storage, should it be necessary.
Finally, with the iPhone OS, maemo, Android, ChromeOS and the other new OSes from the past 3 years, it seems we're entering the age of ad-hoc OSes. I wonder how good the communication between those will be.