It looks like the Web operating system is becoming more than just a concept and an argument for marginalizing desktop OSes.
Take a look around and you can see several companies thinking more broadly than just building single Web applications. There are "Webtops," or systems for running multiple Web apps in a single browser window. Laszlo Systems recently released its Flash-based Webtop which it is selling to businesses looking to create rich Internet applications.
And there are others, like YouOs and Xcerion, which have the more ambitious goal of recreating a desktop operating system on the Internet. Even desktop software giant Microsoft is building Windows Live Core, a set of services for building and running services in the "cloud." For more on the progress of the Web OS, check out this CNET News.com article. For more detail on Xcerion, see this CNET News.com story.