Weather in Google Maps
google-latlong.blogspot.com
google-latlong.blogspot.com
Also the next obvious step would be to add doppler radar and satellite cloud coverage, not just pictures of suns and moons everywhere.
That said, if I was serving up as many tiles as google does, I'd go for it this way too. You already need a buttload of resources just to handle the request volume, might as well exploit that to save the user on download time and yourself on bandwidth.
For current conditions, you could try YQL, but I'm not sure if it's really current. (A good article: http://developer.yahoo.com/blogs/ydn/posts/2009/12/extending...)
The NOAA service (http://www.weather.gov/forecasts/xml/rest.php) that I've used before just does time series, so you might be able to get the most recent time, but you're right, I haven't been able to find a NOAA API for current data.
Thankfully, the weather channel has cleaned up forecasts (was once a huge mess): http://www.weather.com/weather/tenday/37202
Love this site: http://www.thefuckingweather.com/
I hope google make this available in their api as an overlay, I think my users would love it.
I think the animated radar map is the best I've seen among all contenders (wunderground, weather channel, and now the google weather offering).
http://www.theweathernetwork.com/weather/maps/on_toronto/cao...