The Register has an exclusive story based on a public email from Google engineer, Gary Kačmarčík, and some follow up correspondence. The capability will be called “Chromoting” (which right there has my inner skeptic squinting his eyes at that name) and there are few details beyond that. Kačmarčík did compare the feature to something like RDP or VNC but executed from within the Chrome browser. The requirement of an additional machine running a traditional OS seems kind of a steep cost for someone in the market for a netbook, the intended target device of Chrome OS.
I suppose Google’s view is that netbooks are accessories not entirely independent computers. It isn’t too far different from the dependency inherent in the non-“legacy” applications Chrome OS will support, that is to say web applications that will require either a persistent connection or savvy developers to make use of newer web APIs for offline applications.
I suspect that the remote application feature will function something like the transparent mode most desktop virtualization tools provide. That is, rather than getting a typical RDP or VNC session which is a single window with the entire remote desktop, this capability will make it appear that only a single application is being remoted. That wouldn’t be too far of with can be done with a pair of X servers which you can run on Windows and Mac OSX as well as Linux and Unix systems. I suspect the first hackers to get their hands on a build with this feature will be able to sniff out the remote communications and tell us if it is indeed a frame buffer type tool, like VNC or RDP, or something more akin to XDMCP.