Neat idea. Could be useful for marking property sizes or lots for a housing complex.

There's one big usability problem that I encountered: You start with one marker (showing the address the user entered), but it isn't used in calculating the area at all. It's especially confusing because the initial directions bubble is coming from it, which for me implied that it was the marking the first corner of my shape.

I think you should either not show the address marker, or (since it's draggable) use it in calculating the area. I haven't used the Google Maps api before, so I don't know how possible those suggestions are.

Double clicking markers zoomed the map in and didn't remove them.

On the directions:

I think you should move the last bullet point to a persistent place above the iframe code. It shortens the directions and keeps the information available in case the user forgets or skips them.

You should clarify the "toggle filling" option. I was expecting a color change, not a fill or no fill. In fact, I would drop this option and just default to fill.

So I'd reword the directions as:

  * Click the map to create markers. 
  * Drag markers around to define your area. 
  * Double click a marker to remove it.

Edit:

Thinking about the fill or no fill thing, I can see how it could help differentiate between an area and a route. But a route doesn't have to connect. Maybe you could add the ability to make routes?

Edit 2:

It doesn't seem like you can specify markers exactly. What's the point of using this instead of marking up a screenshot in Photoshop?