A message now informs users that Google "will automatically export your Notebooks to Google Docs starting November 11, 2011". The FAQ explains that "once we start the transition, each notebook you have will automatically be exported to Google Docs. We will do this for every single notebook, and you won't have to do anything. This export will work the same as the existing 'Export to Docs' feature in Notebook. The format of the new documents will be as if you manually exported each of your notebooks to Docs."
Google hasn't released a new app for notes probably because the Google Docs word processing app is good enough to handle notes. There's even a cool Chrome extension developed by Google that lets you take notes and synchronizes them with Google Docs.
{ Thanks, Shahed and Taylor. }