This isn't really surprising at all. Google's used a customized Linux internally for a few years now, so it's not surprising that they would release a version to the public eventually. I bet the Ubuntu guys are pretty nervous right now, though.
The big question is if Google can address the big issues that every other Linux distro has been struggling with for the past twenty years - inter-compatibility with other distros, software and hardware support, etc. If they can't get it together before ReactOS becomes stable, then we shouldn't worry too much. Not that we should take the news lightly, but a thought.
-Joshua Bailey
From: Matthew Therault <matthew.therault@gmail.com>
To: ReactOS Development List <ros-dev@reactos.org>
Sent: Wednesday, July 8, 2009 1:41:49 PM
Subject: Re: [ros-dev] why wasnt ReactOS invited to GSoC? here is the answer....
Everyone kind of knew this would end up happening. They were saying this when they put out google docs. They thought that this eventually lead to a new OS. However, it isn't really new, just Linux with a google front end. Also here is a link to the blog for the people that only know english.