Short story, a google version of the iTunes Music Store, and (currently) only available in the US (but available now). This all sounds wonderful, but sadly as a Canadian, I won't be able to see or experience it (possibly for a very long time, based on the fact that going to Google.com/music sends me to the user not invited page. *sigh*.
There's the About Google Music page you can get more info on it as well. Still haven't heard anything other than "in the US" from the keynote.