Lots of comments here are (rightly) skeptical that individuals will download a new OS. But that's probably not Google's main intended audience. Running on PCs is a happy (if necessary) side effect of the Intel-dominant world.
The most basic and original function of an OS is to mediate access to the hardware. Windows got where it is today by 'owning' the hardware ecosystem, from the original IBM PC through all the gazillion peripherals, Intel iterations etc etc. Then they cemented leadership by pushing the app suite (Office) that is the de-facto standard for business.
If you want to challenge Windows you have to tackle the hardware problem. It's only recently that open-source has had the critical mass to address this. And it's in the past 12-24 months that new classes of hardware have begun to emerge to challenge the PC.
So my guess is that Google sees the planets aligning, and are aiming NOT at displacing Windows on the classic PC platform, but creating a free and viable alternative for all the new classes of hardware they hope we'll be migrating to...netbooks, tablets, uber-phones, embedded, whatever.
Disruption! Love it.