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The unique aspect of Chrome OS is that it will be completely executed inside the Chrome browser. For example, things like applications, configuration, and file management are all contained within tabs on the Chrome interface.
One key characteristic of Chrome is that actual data storage and programs themselves are all stored and run online -- local machine storage is only used to speed up those processes. You can liken Chrome OS to a thin client of sorts, though the application is clearly different.
Chrome OS is also fully open source, and will run on a wider variety of hardware than standard x86-based PCs. However, it is specifically tailored to the hardware Google intends to support, meaning you may have to seek out "Chrome OS approved" hardware. The demo, which you can watch here, was done with an Eee PC. That being the case, I have a feeling Google will push to make Chrome OS available on a very wide variety of mobile devices.
Google hasn't given any timetables or specific release dates, only assuring people that development is underway.
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