They’re telling us they’re getting started a little late because attendees got caught in traffic. That’s nice of them, I guess.

Sundar Pichai is at the lectern. He says Google is a year away from launching Chrome OS, but they want to show off what they’ve done so far. (Big disappointment here; blogs had spread rumors that this was a launch.) They’re open sourcing the project, and the code will be totally open.

He starts off talking about Chrome, the browser. He calls it the foundation of everything Google is doing with Chrome OS. One year after launch they have 40 million users. Google claims its Javascript performance is 39 times faster than Internet Explorer 8. It has had 19 stable releases or updates, and HTML5 is making the web more powerful.

Chrome for Mac will be ready before the end of the year, he says, plus Chrome for Linux. There are also Chrome extensions coming. He claims the extensions won’t slow down the browser and that Google will automatically update them.

Google is trying to figure out a way that web applications can take advantage of the same computing resources that mainstream client apps have. He says Google is trying to make sure web apps have access to graphics processors so 3D games can run in the browser. Google is also working on multithreading, real-time communication and a database API for local storage.

Now he’s talking about a “perfect storm” of converging trends that he argues are creating demand for something like Chrome OS. Consumers are flocking to netbooks because they’re a cheap way to get online. More people are “living on the cloud,” or running most of their programs through the Internet, not their local machines. Phones are getting smarter, laptops are becoming more like phones with all-day battery life and thin, lightweight designs.

Google is asking whether there’s a better model of personal computing. Google is focused on three things:

Speed, simplicity and security.

Google wants Chrome OS-based machines to be instant-on, like a TV. Google’s Chrome browser will be especially fast. “Chrome on Chrome OS is blazing fast,” he says, immediately raising questions about whether they need to change the name of either the browser or the OS.

Every app in Chrome OS will be a web app, he says. The data will live in the cloud, so if you lose your machine you can get a new one and just pull down all of your data and preferences.

(A nit here: Google says every app will be a web app, but they also say they’re working to make web apps act just like desktop apps – so it’s a little unclear exactly what this means.)

Now he’s showing it. The OS looks just like a browser. He says the final version won’t look exactly like it does today, but some features will carry through:

APPLICATION TABS: Just like the Chrome browser, this OS has tabs for navigation. You can put favorites up there, and they always stay in place. (I hope there’s a full-screen mode to make these go away, or games won’t work well.) There’s also a menu showing all of the apps.

PANELS: There are little windows that pop up, like Gmail chat or Facebook chat, that persist across applications. All data will live in the cloud, so everything you put on the screen will be instantly available anywhere.

Now he’s pulling up a chess game that’s written in Flash. Now he’s pulling up a book, Alice in Wonderland. (There is a full-screen mode, which answers my question about those persistent tabs.)

He’s pulling up a Youtube video to show that flash works, and he’s showing how you can navigate between different windows. Looks pretty intuitive, but he’s plowing through it so fast it’s tough to tell.

Now he’s showing that Chrome OS works on the web, and that if you have an Excel file but don’t have Excel, it opens just fine with Microsoft’s Live Office web-based software. “Microsoft just launched a killer app for Chrome OS,” he jokes, and quickly clarifies that he’s a Google Spreadsheets user.

He shows that PDFs open very quickly from the web, right there in the browser.

Now Matt Papakipos, who heads the Chrome OS engineering team, comes up. (The Google folks in the corner clap wildly, which is a little weird. All of the journalists are typing.)

Speed is a big focus, he says. He repeats that they want it to feel more like a TV than a computer. All of the hardware for Chrome OS will be based on flash, not hard drives. “That makes a huge difference” for speed, he says. He’s contrasting today’s operating systems with Chrome OS. When they boos, today’s OSes start with firmware, then a standard kernel, services, start-up apps, then a browser. Chrome will only have three steps.

He’s talking about security, and Security-Verified boot. They want to make sure every time you boot that you’re running what you should be. (This sounds like an automatic virus scan, only different.) It checks the cryptographic signature keys to make sure they’re legit. If something goes wrong – if something’s corrupted – it pulls the right stuff off the web and repairs itself, then reboots. “We repair the system automatically. Basically what this is doing is re-imaging your computer. … You don’t lose anything in the process.”

How do they make sure apps don’t harm your machine? Current OSes use a model where apps have the same privileges you do. Installing an app is a great risk because of that. In Chrome, all apps are web apps and the security model is different – the OS doesn’t trust any app.

(There’s an interesting philosophical approach showing itself here. These Chrome OS PCs will implicitly trust Google to do absolutely anything to your machine, even re-image it, almost without telling you. But it doesn’t trust the apps – or trust the user – to do much of anything. I imagine some security pros will raise red flags about this.)

Now he’s talking more specifically about security, how everything is encrypted. If someone snatches your flash drive, it will be tough for them to crack it and steal your data. (But since everything on the laptop is synced back to the cloud, that’s the weakest link here; all a thief has to do is steal your online login and he’ll probably have access to not only your Google accounts, but also everything on every Chrome OS PC you own.)

Sundar is back talking about how they will go to market with this. There aren’t a lot of details yet, but there are a few. They’re going to be very specific about what kinds of hardware Chrome OS will run on. “As a consumer, you can’t download Chrome OS and install it on any machine. You have to buy a Chrome OS machine.” Interesting. Makes one wonder whether hobbyists will be able to build their own.

It strikes me that what Google is talking about here isn’t really a PC. It’s a Google-controlled appliance that runs on a web browser. It’s more like a Kindle than anything else.

Google’s now showing a 3-minute video that the marketing team came up with to explain what Chrome OS is. It’s classic Google video. Cartoony, very easy to follow. It argues that the web browser is the center of the computing experience, where we spend 90% of our time. So Google made Chrome, and Chrome is fast. Since we all just want to get online, and today’s computers take too long to get online, Google made Chrome OS that boots straight into the browser.

At the end of the video, all the Google people in the corner clap again. Which, again, is weird.

Now, Q&A:

What will a Chrome OS netbook cost?
Google won’t say. “We expect to have devices in the price ranges people are used to today. … You will see larger netbooks than you are seeing today.”

Someone asks what Chrome OS was running on today: it was an off-the-shelf EeePC.

How will manufacturers sign up to build a Chrome OS machine? Google has info online. Developers? There’s info online. Standards? Google is working with the W3C. No clear answer on APIs. In general we want to see all of this get standardized.

Will there be an app store? What about drivers? What about photo editing or video editing apps?
No answer on the app store. There are hundreds of millions of applications on the web already. Google is working on drivers. On the third question, Google is focused on making the Chrome machine a second machine. It might be the primary device in terms of the amount of time you spend, but there will be things that this won’t do. If you’re a lawyer editing contracts all day, this won’t be the machine for you.

Will Google support Silverlight? Google doesn’t answer, but seem to leave the door open to it.

How will other browsers run on the machine? They won’t. By open-sourcing it, Google is making it possible for someone else to make an OS version based on another browser. Interesting. So, no – no other browsers will run on Chrome OS. The browser is the operating system. (Neither Microsoft nor Apple would get away with this.)

Will this run on more robust machines than netbooks? It could. But for the next year or so, Google is focused on things that look like netbooks.

Will it work when you’re not online? You’ll be able to cache stuff locally. With HTML5 offline capabilities, that will work too. Google is focused on WiFi as the primary connectivity option. They don’t answer whether they’re working on cellular too.

Will there be native apps? Our current plan is to only support web apps.

Will Chrome run on ARM? It will work on both x86 and ARM.

How long before this works on more powerful machines? And is there a business model besides sending more traffic to Google? No business model that he’s speaking of. He didn’t answer the question about when it will work on full-fledged PCs.

Is there anything you can do with a Chrome OS machine that you can’t do with a laptop? (Good question.) The answer isn’t too coherent. Aside from instant-on and security stuff, there’s not much difference between running the Chrome browser on another PC, and running a Chrome OS PC.

Will the data cacheing be open? (I didn’t catch the answer to this question. But I suspect the answer is no; these machines will be locked into Google.)

No drivers. Keyboards and mice will work. Chrome OS will print. (An easy way to do this would be to keep the drivers in the cloud and create a USB receiver that hooks into a printer or other devices.)

The Q&A is over.