The rumors where there, it was not one of the best kept secrets, but it surprised many tech analysts when Google didn't announce some kind of TV play on day 1 of its annual developer conference in San Francisco. Day 2 did not disappoint however, with Google and partners announcing the coming of Google TV an Android based service which "lets people visit any Web site from their televisions and easily search for programs and Web video without scrolling through unwieldy on-screen TV directories." according to this NY Times article.
Google TV will come built into Sony's high-definition televisions and Blue-ray players later this fall and will also be available via a set to box developed by Logitech. Price was not discussed but the service is said to require Intel's Atom chip set which is bound to drive costs some. Sony exec's also hinted that they were likely to adopt Google's software over their own Bravia software at some point down the road as it is more robust.
“Google TV is more than anything finally going to create some energy over at Apple to make a television, or at least a version of the iPad that docks with a TV,” said James McQuivey, an analyst at Forrester Research.
The Official Google Blog has more details.