Brilliant.... if done well
With the processing power of current and future phones, it is a waste not to use the potential of the phone hardware to run a desktop OS.
If Google manages to make it good, safe and manages to enforce an industry standard cradle or interface that all manufacturers producing Android phones have to be able to interface with, tossing the phone in the cradle is sufficient to continue the desktop work where one left the day before. If this works with all Android devices, and they offer good connectivity with Google Apps, some might actually start thinking if it is useful to continue paying over $ 200,- in licenses for just OS and a confusing overloaded word processor.
I hope they succeed, and finally manage to liberate the world from the desktop strangulation.