It is not a replacement for GWT. Closure is for people that want to write Javascript. GWT is for people that want to write Java.
source: http://code.google.com/closure/
Closure Compiler: A compiler that takes Javascript as input and produces Javascript as output. Removes dead code, does various optimizations, and usually beats other minifiers by a small but significant margin.
Closure Templates: a templating system that generates Java or Javascript code. Handy if you want to generate a bunch of HTML from templates in Javascript, and you don't want to write all that by hand.