From the concept reading/videos that I have looked at, it seems that Google is looking to boot this thing straight from ROM. They state they are bypassing a lot of standard startup procedures and skipping any boot-loader; instead they are going to a kernel load and letting their OS do all that lifting (not because they can do it better than the hardware manufactures, but because, I would think, they don't actually want all that hardware there that you could do something with that isn't on the cloud). This means that you pretty much have to have a board with the ability to flash in Chrome OS, or be buying a machine that can do it. If you are getting a new netbook with Chrome OS on it, then yes, you are going to be getting back to bare bones. It sounds like, however, that is then all you are getting.
A comment from the engadget article made a really good point. To quote Dave95 about a cloud OS on a netbook:
That sounds an awful lot like what we do with our smart phones and iPads today. Sorry just don't see the need for such an OS on Netbooks. And with it being web based (web apps and services), you most likely will need a constant data connection anyway. So yet another device tied to carriers with contracts paying yet another data fee (my guess).
I think this is a very good point. If everything has to be done online, then don't you need constant, reliable connection to the internet?
Is a bare-bones, web only OS what people really want out of a netbook? I don't believe they do. I think people want an ultra-portable laptop that they can pull out and do a few things on at a moments notice. Yes, most (all with a few outliers) of those things are online. As Dave says though, how much of that can't be done on a smartphone or at least a tablet?
Google isn't exactly breaking into new territory here either. ASUS has played with this in the past, and Splashtop (http://www.splashtop.com/) is a popular product that ASUS and other board manufactures have bought into on some of their models. You have an instant on OS that gets you some internet goodies, and when you are ready you boot into a full-blown (arguable I suppose) OS if necessary.
Chrome OS, as I understand it, is not useful for netbooks in my mind. I don't even see netbooks being useful in the next few years. Small and ultra-portable... get a tablet. If you really need that keyboard, should be a nice market for a tablet with a kickstand and a pull out keyboard or detachable keyboard built into the back of the device (may already be one... haven't looked). I see Chrome OS being a much nicer fit for laptops and even desktops. I actually think that on a laptop or desktop, if Chrome OS had the ability to boot into Windows or Linux out of it, the platform would fair much better. Quick boot into your web-surfing -slash- half-production environment, and then when/if you need to, go to your full-production environment. Google, however, will probably not do this as they want all your internet needs through their services and their web-enable OS.
Therefor, I don't see Chrome OS going anywhere till we have cheap motherboards with that new BIOS-replacement flashable ROM running it (or BIOS that are extended to use *flashable* ROMs like Splashtop or Chrome OS) and with built in Type-1 hypervisors for local virtualization. That way you can choose to have one or both of your quick, web-only OS load and your full production environment OS load at the same time. You do your morning coffee ritual reading on Chrome OS (or whatever) and when it is time to do actual work for the day, you flash over to the production OS that is all loaded up and waiting (secure logins may need some work to get this running smoothly, but that is a minor glitch to work out). Then I can see Chrome OS really taking off, especially in the consumer market (big business, maybe not so much).
That's my 2 for you.