From the RegisterThis would make more sense, although I have also heard rumours that it's real and it's made of plastic and friends of friends have nearly touched it. The core bit of this wave of speculation is what Google Gears does in mobile. Opera have "endorsed it". Symbian is believed to be putting more or less the same functionality in the next OS release: cobble together an HTTP proxy and a database together with some scripting and you have a Gears clone. Mozilla like it but Minimo is still too big to play nicely in phones. I'd be very surprised if the iPhone doesn't have some cache magic in it.
It would be more sensible to keep it as a reference platform: Google stand to make more money out of extending the reach of their core business (that'll be small ads) than they do getting involved in hardware. Particularly phone hardware, which I have this horrible feeling Apple are about to discover is a horrendous business.
Working with intermittent connections is a big constraint on mobile applications, and it makes sense to cache information where possible. This isn't the best approach for information rich applications (working a day trader screen in Google Gears would be foolish) but standalone apps like Writely^H^H^H^H^H Google Docs don't actually need a network connection: they just need a storage of some variety.
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