The only thing that's actually new about Microsoft's news is that they've finally put an official name to the project - Midori. Most techys will recall that this was actually the plan for a post-Longhorn (now known as Vista) OS at about the time of XP's launch, although back then broadband was too far behind in Europe for such a thing to be realistic (we had dialup).
Even now it’s only a half solution because such a platform has a number of inherent drawbacks, such as its inability to cater for gamers and personal media/movies. To that end you’d still require a client computer, which leads me to think that Midori is more of an addition to Windows than a replacement, at least in any initial iterations. After all, Microsoft wouldn’t want to shoot itself in the foot by destroying the hardware side of the PC market.
Still, it’s always been a clever idea and I do think that one day Midori could replace Windows but you’d be looking many more years into the future for that to happen, present networks are still too restrictive and costly for it to be of anymore use than a glorified mobile office application. Naturally Google already has something similar.
Personally I’m far too paranoid about security to allow any of my sensitive/private/personal data to be hosted virtually, which could potentially become a hacker’s paradise. I’d also miss being able to tweak and fiddle with hardware and software

, not to mention that IT folk across the world could end up out of a job.