The keycode is unique to each log-in attempt.
Of course, paypal's "I lost my authenticator, log me in anyways" button is kind of defeating the purpose...
Unless I'm missing something, RFC 4226 sounds like the RSA SecurID system I've worked with before; which is essentially equivalent to Blizzard's system for World of Warcraft.
In which case, my criticism stands. It's trivially more difficult to phish a keycode and the limited window of opportunity is simply a non-issue.[1]
Unless Google is calculating a one-time pad based on the individual login attempt and sending it along a second channel to the registered user, there'll be almost no reduction in phishing.
[1] The tens of seconds a keycode is valid are more than enough to establish a connection.
Which in turn means you're more likely to get detected. It's not full protection - you'd still need a second channel for that - but it's better than nothing.
It does many good things. That is not one of them.
You can download the Google Authenticator app.
These algorithms are known. You can implement it yourself if you wanted to.
If it is only a moment in time, I assume the phishing script could simply log in at the same time and hope the user has the "once per computer" setting enabled. Though this seems like too big of something to miss. Can anyone offer some clarification?