HTML 5 has exciting prospects for web applications. It will hopefully result in the end of plug-ins, like Flash, and allow for a more universal standard across the internet. One possibility would to be able to have 3D graphics in web pages. The result could be high-end games directly available on web pages, not suffering from the performance load caused by Flash.
It is interesting to note that this announcement comes on the heels of Microsoft’s release of its new IE9 platform, which introduces HTML 5 and Direct2D hardware rendering. It showed off some very impressive SVG based demos. Google is taking the Microsoft threat very seriously, and has an added stake due to its browser based OS, Chrome OS.