Why take the most popular Google services out of beta & reveal Google Chrome OS out of the blue? That's because it's almost certain that this Monday, in addition to Windows 7 RTM & Office 2010 beta, the Office Web Apps will be released (as so conveniently hinted by @scobleizer).

Getting back to Google Chrome OS, here's the blog post with the announcement - but I'll be quoting only the most important parts.

Google Chrome OS is an open source, lightweight operating system that will initially be targeted at netbooks.
Speed, simplicity and security are the key aspects of Google Chrome OS. We're designing the OS to be fast and lightweight, to start up and get you onto the web in a few seconds. The user interface is minimal to stay out of your way, and most of the user experience takes place on the web. And as we did for the Google Chrome browser, we are going back to the basics and completely redesigning the underlying security architecture of the OS so that users don't have to deal with viruses, malware and security updates. It should just work.
The software architecture is simple - Google Chrome running within a new windowing system on top of a Linux kernel. For application developers, the web is the platform. All web-based applications will automatically work and new applications can be written using your favorite web technologies. And of course, these apps will run not only on Google Chrome OS, but on any standards-based browser on Windows, Mac and Linux thereby giving developers the largest user base of any platform.
Google Chrome OS is being created for people who spend most of their time on the web, and is being designed to power computers ranging from small netbooks to full-size desktop systems.
We hear a lot from our users and their message is clear - computers need to get better. People want to get to their email instantly, without wasting time waiting for their computers to boot and browsers to start up. They want their computers to always run as fast as when they first bought them. They want their data to be accessible to them wherever they are and not have to worry about losing their computer or forgetting to back up files. Even more importantly, they don't want to spend hours configuring their computers to work with every new piece of hardware, or have to worry about constant software updates.

Amidst all the over-hype, mostly by TechCrunch & Mashable, let me clear this misconception once & for all - Google Chrome OS is not your everyday Windows or Linux or Mac OS.
It's just a BROWSER!!!

Installing apps, watching movies, playing music files, heavy gaming, sync devices, encoding, photoshoping etc. you won't be able to do any of that!
Chrome OS is based on a Linux kernel & will be running a single app - Chrome. All the "apps" that'll run on Chrome OS will only be the web-apps - GDocs, GMail, Zoho, Aviary, Buzzword, Picknik, Photoshop Express, etc.
Yep, no Firefox, GIMP, VLC or OpenOffice. Not even your favourite Twitter client!

Why?
Because Google Chrome OS is aimed towards netbooks, mostly used for web browsing & light app usage.
The CrunchPad is the perfect device to illustrate this - a multi-touch tablet whose only feature is to get you on the web.

How do you keep an "OS" secure?
Cut off the weakest link, the apps, & lock down the OS, leaving only a single app - Chrome which runs everything sandboxed.
It also means that the OS is maintenance-free, efficient, quick to boot & shut-down.
Hence Google can direct its resources towards improving the OS & Chrome instead of solving compatibility problems. If the web-apps don't work, Google won't be blamed!

How to ensure driver compatibility?
That's were the OSS community comes in play. I suppose Google will be providing Chrome OS with generic drivers which should work straight out of the box like Puppy Linux or Damn Small Linux. & once Chrome OS connects to the Internet, it downloads the rest of the drivers.

& how to make sure your printer or device X works? (supposing Chrome OS supports devices)
Google will probably be leaving this to the OSS community to compile their own drivers.

I suppose by now Google Chrome OS doesn't seen that much attractive. But Google have a few more tricks up their sleeve.

Google Wave
Do I even need to explain that? Best collaboration tool ever.

Gdrive
How do you keep all your data up to date, accessible from anywhere. That's where Gdrive comes in - it should have the same features as DropBox.

Google Gears + HTML5
Offline mode for all your web-apps.

Extensions
Chrome 3.0 supports extensions, albeit a horrible implementation. Once things straighten up, almost all extensions from Firefox will be ported over to Chrome.

Native Client
The best bit for the last. Native Client will allow x86 code to be executed directly on web-apps! At last some real apps. In my opinion, this will be the killer feature of Chrome.

But...
Privacy & Security
Yep, more than ever, you'll be handing your entire web existence over to Google. Obviously, they'll be monitoring to serve you relevant ads, but to what extent? Illegal file-sharing? Pr0n? Who said it can't be hacked?
Imagine for a while how easy it will be for China to implement its Great Firewall if all the computers ran Chrome OS, a single browser!

Internet Connectivity
If you do not have access to Internet, no Chrome OS for you. Google Chrome OS is targeted towards netbook users, not Third World countries with crappy connections. I suppose the minimum speed for running the web-apps would be 512k/1M.
& suppose one day your Internet is down, even those offline apps won't help you get rid of your web addiction.

Apps
In spite of all those web-apps & Native Clients, when you'll still need to go back to your real OS for the heavy work. Take for example AutoCAD, there's no way you con replicate that on the web. That's why it's meant for netbooks.

Chrome
This one is pretty obvious. Why would even want to install Chrome OS on your desktop if you can install Chrome on any OS! Getting the best of both world!

Will it kill Windows?
ROFLMAO :P How ridiculous! Google Chrome OS is for a niche - portable devices with quick access to the web.
For everything else, you'll still need Windows. & don't forget Microsoft already have Gazelle, the browser OS in the works.

It's instead Mozilla that should be concerned. Chrome with its extensions & Native Client will inevitably entice away Firefox users.
The Linux community should also be concerned that instead of using an existing distro, Google are promoting their own OS, thus undermining their efforts.

The Bottom Line
Unlike what Mike Arrington would like you to believe, the web/cloud is not everything. The biggest hurdle to cloud computing is indeed connectivity. In the real world, not everyone has 8Mbps connections & neither are free Wifi spots available everywhere. Web-apps are good for doing the basics. But if you need to harness the real power of computing, it’s still your good old desktop apps. Yes, Google Chrome OS is a great thing – more competition is always better for users, but it’s just a browser!

Great read - 10 Things We're Dying to Know About Chrome OS

According to Mozilla, Firefox 3.5 was such a major update that they decided to leap the version number from 3.1 to 3.5 to reflect this.
Let's take a look at the list of new features:
- Faster Tracemonkey Javascript engine.
- Private Browsing mode & Forget About This Site history option.
- Restore closed tabs.
- Some support for HTML5 including audio/video tags.
- New CSS features.
- Geolocation


Private mode was already present in all browsers except Opera. & you can't do both normal/private browsing at the same time. IE, Opera and Chrome could all restore closed tabs. The much hyped HTML5 open audio/video was killed in the egg by W3C. Tracemonkey engine was forced upon by the Browser speed Wars Chrome initiated. So the only new feature is geolocation, which is next to useless if you live in Mauritius.
To sum-up, Firefox 3.5 is what we can define as playing catch-up to the competition.

However, I'm more interested in the performance of Firefox 3.5. To find out, I decided to compare it against the other major browsers on Windows 7 - IE8, Opera 10 Beta 1, Chrome 3.0.190.1 Beta & Safari 4.
Note: It's completely different to what Lifehacker tested, probably because of the huge gap in hardware performance. So the following results are more suited to older machines.

Opera 10 is still in beta. Hopefully this will be fixed in the final version.

IE8 has surprisingly the lowest memory footprint, followed by Safari, Opera & Chrome. However Firefox 3.5, without any extensions, uses more memory by a huge margin!

The above speed test shows that all the browsers are fast enough, with Firefox 3.5 being slightly more consistent.

For Chrome & IE8, each tab having its own process contributes significantly to higher memory usage. However, the biggest culprit is Safari, which proved to be a huge resource hog - even the CPU usage proved to be higher. Firefox 3.5 can somewhat claim to have the lowest memory usage.

Firefox 3.5
Firefox's numbers are misleading! Because once you enable even the most basic of extensions, it's back to good old bloated Firefox 3.0. Memory usage climbs to an average of 100MB on a single tab. It takes around 10-15s for Firefox to load even on a warm startup.
As I had long suspected, but which very few tech blogs reported, Firefox 3.5 is an unfinished product. Mozilla rushed its release to meet the deadline, leaving along most of bugs from Firefox 3.0. There is still a damn permanent bug, observed in Betas & RCs and now the final version, that pops a tab as a new window! There were no memory optimisations and features were left out. Is this all Mozilla have been doing for over ONE YEAR?!? 
It doesn't have Ubiquity built-in, nor the new visual Ctrl+Tab tab switch & neither does it support the next version of Windows!

No support for Windows 7 tab preview!! This one really annoyed me, because I was expecting it.

IE8 does it perfectly.

Even Safari has half-implemented it. The real-time thumbnails display correctly, but you get a black tab when you try to peek at the tab.

Verdict: A faster, but equally bloated Firefox 3.0. Firefox 3.5 SUCKS!!!

The Competition
IE8
IE8 renders websites as you'd expect Firefox 2.0 to do & the Compatibility view breaks them even more. & then there's the New Tab lag. Otherwise it's relatively slow, but its great strength is the tab preview on Windows 7.

Safari
Safari tried to copy the features of all the browsers & it failed. Massive memory & CPU hog. Top Sites & History in Cover Flow mode is just a visual gimmick. & it doesn't support extensions. Not to mention that it tries to sneak in iTunes & Quicktime on each update. & btw Safari is certainly not "the world's fastest browser."

Opera
Opera 10 is still in beta & has quite a few design issues - the autofill Wand has a key icon! However in terms of native features, it's probably the best out there, especially with new Turbo Mode & Opera Unite support in future versions.

Chrome
Chrome 3.0 supports extensions! Although, I could get only one to work. With its clean interface & fast browsing speed, Chrome may pose the biggest threat to Firefox (i.e. until they make the Most Visited thumbnails an option).

The best browser?
... doesn't exist! Sorry fanboys, but there is no point sticking to one browser. Each browser has its strength & you try to get the best out of it.
Use Firefox for its extras - AdBlockPlus, Firebug, Greasemonkey & the rest! Use Chrome when you need to do some quick browsing. Use Opera's Turbo mode when your connection is slow (it doesn't work with Twitter). & use IE8 for... downloading the other browsers!

So what's your favourite browser? Let the Browser Wars begin... :P