This sounds like a step in the right direction; Google obviously have their own commercial agenda, but this needn't be incompatible with the rest of the open source movement. After all, Linux always needs development funding and Google has deep pockets to help with that.
From a commercial point of view, the Google brand is a good one to sell to OEMs and consumers, if it's slick and delivers the netbook experience that people want then there's no reason it couldn't get a good slice of the market.
Windows XP on netbooks is less than ideal (especially on limited SSD space) and IMO it's success there has more to do with Microsoft's OEM marketing and users familiarity with the Windows XP brand than any real advantage.
I have an Asus eee 901, bought with XP installed as it was on offer (thanks eBuyer), but I find myself using Presto more often these days.
There will never be a one-size-fits-all operating system, so if Google's marketing power can move the Linux case forward this can only be a good thing.