Google just updated their desktop search tool. And a new sidebar feature. The sidebar feature is a bit spooky. For example, it knew the blogs I frequent and it put them up on a web clips panel. It also creates a photostream from the My Pictures folder. A cool slideshow.
If you have not downloaded Google Desktop you can get the software here. Highly recommended. PCs only though for now. Mac folks already have Spotlight and Widgets.
Some folks think that Google may be looking to displace Microsoft as the next generation computing environment. A bit of a stretch right now however it is nice to see some software innovation on the Wintel platform as we continue to wait on Microsoft. More about Google Desktop 3 here.