Google has released an Aura window manager which has all the functions of a traditional OS.
Along the bottom of the screen there is a Shelf which hides when you've got a browser window maximised. But you can choose to have it always on top or auto-hide, too. In other words it is a Windows taskbar.
Left of the shelf are Google-pinned shortcuts. A Chrome icon opens a new tab, and Gmail, Google search, Docs, and YouTube. There is one to open browser windows.
If you press another icon you can see your Chrome apps floating above your current wallpaper. Windows borders have transparency effects.
OK, it is not Windows yet. But it is showing where Google is headed with this and what it wants its future to be. Chrome will be Android for Tablets and eventually the PC.
It will not need the full power of the operating system because most of its functions will be cloud based. Already the OS has a photo editor which allows snaps to be uploaded individually or in bulk to Picasa.
Google appears to have improved its hardware acceleration features.
According to Geek Week, the update is incredibly unstable with tabs crashing and background tabs often reloading. But then Microsoft Windows was like that for years.
It's clear that Google feels that Chrome OS is nearly ready to go toe-to-toe with Windows.
Of course then it has to face the Linux desktop problem. It will only compete with Windows when it has enough software out there to run on it.