Google just launched the Chrome Web Store where users buy and install "web apps" in Chrome. But all the examples I tried were just bookmarks to ordinary web pages. So what's an app? It's explained better here and there's a full article here.

Hosted apps are basically fancy bookmarks. A manifest file specifies a name, an icon, etc. It also has support for elevated permissions (accessing the user's location, for instance) and an auto-update mechanism. It only takes 15 minutes to turn any web page into a hosted app. It's a sensible Netbook feature, allowing a fancy icon that says "Email" to click on instead of a generic bookmark.

Packaged apps are more complex, more like browser extensions in that the code is installed locally and has extra APIs into the browser. But where extensions are for modifying pages (say, by removing ads), packaged apps have their own UI for a specific task. Like a Twitter client or a game. Packaged apps can run entirely offline.

Once an app is built it can be uploaded to the Chrome Web Store: there's a good tutorial on the process. There's some minor hoops to jump through but no mention of a required review before going live. The store is an interesting new marketing channel but I'm skeptical that for-pay apps will thrive.

We're at a transitional moment for web apps: distinctions between web sites and local applications are being blurred by HTML 5's application caching capability and APIs like local storage. If I were building a web app now I'd build it entirely in generic HTML 5 that works in any browser but uses all the fancy new HTML 5 stuff to make it work like a locally installed application. Then make it a Chrome hosted app to take advantage of the Web Store marketing channel. I'd avoid the extension / packaged app route unless there's some technical capability I really need that's missing in HTML 5.