Google Gears 0.3, released last week, added support for Firefox 3 and extended the desktop integration by allowing applications to create shortcuts on the desktop or in the start menu. Google Docs is one of the applications that takes advantage of this feature and shows the following dialog when you enable Gears.
Obviously, it's not very difficult to create a desktop shortcut for a web page and you don't need Gears for this, but the small desktop integration is a nice touch. Google Toolbar for Firefox goes further and it lets you open documents from your computer in Google Docs, but the extension is not yet compatible with Firefox 3.
Mozilla Prism is another project that brings web applications closer to the desktop. "Prism, previously known as WebRunner, is a product in development which integrates web applications with the desktop, allowing web applications to be launched from the desktop and configured independently of the default web browser."
Update: CNet mentions two new features from the next version of Gears: the blob and geolocation. "The blob module lets a Web browser handle a large chunk of data in pieces, for example, uploading a large video bit by bit to better protect against unreliable network connections. The geolocation module gives browsers abilities to use data about where exactly a person using the Web is located, but Google hasn't worked out exactly how to handle the privacy implications of that work."
{ Thanks, Martin and Stephen. }