Jason Kottke at kottke.org describes what a WebOS would need to be capable of. The most important aspect is that you and I can continue working with applications even when the computer is not connected to the Internet -- which requires a sophisticated local cache.
Gee, sounds like Windows! But the idea, of course, is to end Microsoft's dominance. As well as create a programming environment where developers no longer need to write a Windows version and a Web version.
Many of us already use a a form of Internet-access/local-cache: MP3 playack software. The songs are downloaded and then cached locally, as is CDDB information.