It runs on generic PC hardware, though presumably faster, if Google's claims of simpler boot and operation are valid.
The baseline configuration is netbook-like: 12.1 inch screen, Inntel Atom processor, full-size keyboard, USB, SSD, Webcam. It may also have Google's CloudPrint to let you print documents to printers you'll never be able to find in the real world, adn 100MB of data service per month from Verizon for the first two years.
No matter how good it is, a ChromeOS-based PC will almost certainly remain the kind of device used only by a small niche of users in a large company, according to Gartner research VP Chris Wolf.
Though it has some offline abilities, ChromeOS is designed primarily to run from the cloud full time, so it would be appropriate mainly for the kind of task computing help desks, call centers and others on shared-session applications use.
For consumers, assuming it really is as easy to use as Google is projecting and the quality of the hardware isn't so bad it gets shaken apart under normal use, ChromeOS could be a good computer for grandparents, kids or anyone who only needs to browse the Web or work on small documents to be stored online.