First go read Greg Sterling's write up at Search Engine Land named Location in the Browser: What Does It Mean?
Now that you read that, you will realize that the implication of Google adding geolocation capabilities to your desktop browser can be huge. The Geolocation API can run on any browser that has Google Gears and automatically will run on Android and Google's browser, Chrome.
Google currently knows your approximate location for when you do searches only via IP data, personalized search data or other, less exact methods. But now, if the browser can detect wifi locations and/or cell towers, Google will know where you are, almost to your exact location. GPS is supported, but most laptops or desktops do not have GPS devices built in yet (yes, yet).
The reaction to this from advertisers and searchers are split. A WebmasterWorld thread has advertisers excited that Google's geolocation capabilities will be able to target their ads better. But searchers are not yet 100% comfortable with Google knowing their exact whereabouts, at all times while using Google properties. Personally, I am not about privacy - I actually am considering wearing a GPS enabled device with me at all time to track me where ever I go and then publish that data on my personal web site. :)
Forum discussion at WebmasterWorld.
