For years, services like Box.net and Dropbox have offered the ability to store files in the cloud that can then be shared with other individuals or accessed easily from other computers. Google has offered Picasa Web Album users the ability to purchase additional storage space for photos, but now that space can be shared across Google Docs, Gmail and Picasa.
Free users will get 1 GB of storage to store non-Google Docs files. Google's pricing is competitive -- $0.25 a gigabyte per year (so $5 gets you 20 GB of storage space). The only middling detail is that files can't be larger than 250 MB. That means that Google Docs and the Google cloud will be perfectly fine for most users, but for individuals who need to frequently share or access files above 250 MB, this probably isn't going to be the solution for you.
Google is also going to allow users to search for shared or uploaded files using Google's document search, and common file types will be viewable in the Google Docs viewer.
This is a move that users have been asking for for quite some time -- and with a competitive additional storage option, we're sure it will be popular. Even for competing storage and collaboration systems, this offers an opportunity to distinguish features and offerings that Google might not match.