There's Adobe Flex. There's Microsoft's Silverlight. There's Java's JavaFX. Maybe there are others.
These are platforms that would allow developers to put real applications in the browser. And not just the request-response model (http) and the async calls that javascript allows (ajax) and the modification of the DOM tree - SPI (Single Page Inteface - no wikipedia page for it). Or another way to put it - allow real applications to the user, while the browser is only the transport. The code is compiled, object-oriented, which makes is most-importantly much faster.
Pros: faster, a lot faster. developers write in real languages (javascript is a developer hell) - Silverlight is managed, Adobe's ActionScript is ECMA (which is not very promising, I don't know it in much detail, so I can't say), JavaFX is Java. The GUI definition is largely XML in most platforms.
Cons: plug-ins. Not standard. Different user interface and different rules for every platform. Compatibility issues with browsers, operating systems, elevation of rights (admin rights for install, elevated rights for execution).
Most modern web apps (gmail, youtube) exploit the browser to it's limits, my firefox just can't keep up (here and here).
What google thinks: make a browser that fixes all of the problems with the current browsers: most importantly speed, malware issues. Unfortunately developers will still have to write javascript. Fortunately, I'm not one of them. Fortunately, the model will stay open (html, javascript are no one's). Fortunately, the well-known rules of html/javascript pages will stay the same.
Their presentation of their new browser, called Chrome, is very ambitious:
http://books.google.com/books?id=8UsqHohwwVYC&printsec=frontcover#PPP1,M1
If they can do what they promise, I'm going to use it, I promise.
They hit exactly where current browsers fail (or at least with me) - speed, saparation of different pages (for some time I've been wanting to create multiple firefox processes, but don't know how), separation of plug-ins (to know who's fault it is), sandboxes, minimized rights, incognito mode.
I don't know much about Google Gears, but for offline reading of my feeds, it dissapointed me all the times I tried to do it.