The Crunchpad aims to be a browser. Specifically: a finger-friendly one.
GoogleOS would still be dealing with things like USB devices, a variety of internal hardware, offline processing, keyboard/mouse UI, desktop-class apps, etc.
You can see the comparison here between Arrington's vision and Google's post.
http://crunchpadfans.com/2009/07/08/google-steals-fusiongara...
Edit: Of course, the crunchpad is also the hardware component, making it more all-in-one.