That Google operating system rumor is coming true--and it's based on Google's browser, Chrome.

The company announced Google Chrome OS on its blog Tuesday night, saying lower-end PCs called Netbooks from unnamed manufacturers will include it in the second half of 2010. Linux will run under the covers of the open-source project, but the applications will run on the Web itself.
http://news.cnet.com/8301-17939_109-10281744-2.html