Google has achieved an incredible status as the amazing company that can do no wrong. Even the most minor things they release are heralded by mainstream media and computer nerds everywhere. They're going to release a perfect, free GoogleOS with your data everywhere that makes Windows useless and solves all of our problems. Google will take over the industry and free us from Microsoft's shackles.
Well, not exactly. I hate to be the bearer of bad news, but Google is not releasing a consumer OS. They're also not going to make Microsoft (or "M$" if that's what you're into) go out of business.
Making operating systems is not a glorious or easy business. The role of a modern desktop operating system is to simultaneously pull off the following:
Now, let's see what Google does:
There's not much overlap.
Microsoft is a really big company with a lot of money and solid dominance in many saturated markets with huge barriers of entry. They simultaneously maintain tons of different products in many different markets, and they employ far more people and have far more money than Google to pull it off.
But we'll set all of that aside for a minute. What if Google actually did it? What would they get? A huge support nightmare and a drain on their resources. Even Microsoft doesn't want to make operating systems very often. To Microsoft, the operating system is only worthwhile because it allows them to use it as a gateway to sell their other products, services, and content. Google could certainly gain from that, but they've done very well without it, and it wouldn't be worth the massive (and continuous) investment required for them to enter the market.
Google's web applications, such as Gmail, reduce the need to use a particular operating system. Why would they enter a market that they're commoditizing?
Sorry, but there won't be a Google desktop OS. It just doesn't make sense for Google to create one.