Google is engaging with the web development community to help improve the search engine while they go through the latest re-write of the architecture for the web search tool. Usually these things would be done "under the hood" but because these particular updates would probably be noticeable to specialists in the industry, they wanted to make it a more open period of development and allow for structured feedback.
Matt Cutts (an unofficial Google spokesperson) has been blogging and speaking about this. He has backed away from saying these changes are to deal with "real time search", but he does stress that it should allow for indexing "more quickly". It is significant, essentially on the sort of scale as the "Big Daddy" update in 2005, but it should not be a big shake up of results. Effectively it should enable them to provide a more flexible and more powerful search tool.
We are keeping a close watch on the outcome of the changes. At this stage the scale of the impact is difficult to judge, even Google themselves want feedback to help them ensure it is working in the best possible manner. What we do know is that our fundamental principles for SEO do not change.
According to Matt, Google are aware of what Bing and Yahoo! are doing in search development, but Google are essentially focussed on pushing their own tool as fast and far as they can.
The full interview with Matt Cutts can be seen here (you may also notice his new haircut too).