In the real world, 8% surveyed (by Google) in Times Square knew what a browser was.
http://www.youtube.com/watch?v=o4MwTvtyrUQ&feature=playe...
Now try explaining difference between URL bar and Search bar in Safari, Firefox, etc... Give up yet?
I wonder if that survey relates to why Google decided the OS should be the browser, so people might actually use Chrome. ;-)
Best mantra for web design isn't "Web 2.0", it's "Don't Make Me Think."