The WSJ reports that "a service that would let users store on its computers essentially all of the files they might keep .... could be released [by Google] as early as a few months from now."
Many others have launched products that provide limited storage on the cloud, including AOL, Microsoft, and Yahoo, but Google appears to have an unusual take on it, backing up all of the users files and providing search over them.
One way to view this might be as an extension of the "search across computers" feature of Google Desktop Search. That feature already lets "you to search your home computer from your work computer" by copying an index of the "files that you've been working with recently" and "your web history" to Google, but is limited to only a fraction of your desktop files.
From the sound of the WSJ article -- "a service that would let users store on its computers essentially all of [their] files" -- Google not only will let Google Desktop Search indexes all of your files, but also will copy the original file to the Google cloud.
Please see also my older posts ( ) on Google's GDrive.
Please see also Philipp Lenssen's post of screen shots from a leaked copy of a version of GDrive (codenamed Platypus) that is only available inside of Google. It apparently replicates and synchronizes all your files across multiple machines.