"I think operating systems are kind of an old way to think of the world," Google cofounder Sergey Brin told a klatsch of reporters after the Mountain View ad agency's song-and-dance routine to announce its new browser, Chrome. Brin is a little older than me, which I find surprising — not because I'm so old, but because even I remember the days before there really was a personal computer on every desk (and on every lap, and in every pocket). What was there?

Union Square Ventures partner Albert Wenger says he's invested $1.5 million in New York-based cloud-computing startup 10gen, a company founded by some ex-DoubleClickers and a Joost engineer, because there are "some serious issues" with Google's App Engine, a service which allows startups to run applications on Google's servers. Namely, Wenger thinks Google will run the platform's rules to its own competitive advantage. [Union Square Ventures]

Developers who jumped on the Google App Engine bandwagon have gotten an unpleasant surprise. Those who create Web applications using Google's computing infrastructure have found that the Mountain View advertising broker is not-so-subtly asking them to use Google Checkout to accept payments and not rival online transaction processing PayPal, an eBay subsidiary. Valid PayPal domains "accidentally" got caught up in Google's anti-phishing efforts, according to Googler Marzia Niccolai.

To demonstrate its new Amazon S3-killer App Engine, Google built a sample application for the domain HuddleChat.com. The problem: "HuddleChat is just a feature-for-feature clone of 37signals's Campfire," writes Daring Fireball's John Gruber.

Google's boast page for tools built on App Engine was struck by script kiddies with a relatively simple JavaScript-based exploit known as cross-site scripting. Yes, not exactly a high-level attack, but another black eye for a project that, like most of Google, will linger in beta for the next few years.

The sign-in page for Google's new App Engine platform apparently runs on App Engine — and ran out of it's server allocation this morning, triggering the error message above when a tipster tried to sign up.

Now that the announcement of Google's App Engine is official, it's opening up the company's cloud computing infrastructure as an API platform for Web application developers. Basically, it binds computing power, storage and database tools — much like Amazon.com's EC2, S3 and SimpleDB, respectively, but all tied together into one package. Plus, for the first 10,000 beta users at least, it'll be completely free up to a certain level of usage. What's in it for Google?