As an online store that sells T-Shirts, Google Checkout accounts for roughly 5% of all orders, but a very vocal minority that really, really hate Paypal and likes to click any option that guarantees they don't use Paypal.

IIRC, Google Checkout also required US customers only. As it was never extended to the rest of the world, I expected it to never take hold and change the marketplace.

Don't think that is the case. It was limited to merchants in a few countries, but it was not limited to US customers. I once purchased a computer from UK using Google checkout, and I live in Norway.

Perhaps its only true for merchants - I live in Singapore and I could use Checkout to pay for Cadence and Slang.