This is a huge development. I was just discussing this with friends by email (we should be using Wave) and realized the move, although incredibly noble, could be even more detrimental economically to Google's growth outside the US. Totalitarian governments (of which there are quite a few) will become weary of Google's power and possibly inhibit the company's growth in those countries.
On the other hand, this move will probably placate European countries like France which was recently calling for a tax on Google (and other US companies)[1]