Of course, when you think about that scenario, it starts to seem insidious the other way around. People might be less and less motivated to write cross-compatible websites if it becomes easier and easier to work around incompatibility.
I agree with the notion that it is still useless to those IE users that don't have privileges to install addons/plugins. However, perhaps in those IT shops where administrators are required to keep around legacy browsers for legacy plugins / software, this is a attainable middle-ground for the administrators to give their users a better foot to stand on.
Consider the following scenario: YouTube releases a suite of new features, but they require some new functionality from HTML5. This is fine for Firefox, Safari, Opera, etc., but if you're using IE it'll prompt you to install Chrome Frame, just like it prompts you to install Flash. I could see it getting to the point where people instinctively do this just as they do with Flash.
Hell, maybe it could even be used to subvert Flash itself. Suddenly IE users everywhere are viewing <video>-based YouTube videos.
I don't see any reason to believe this particular plugin will take a different trajectory than Gears, which has almost no adoption.
I think a new browser engine offers a lot more opportunity for more tangible, up front enhancements to a user's web experience than client-side offline storage would, at least in an immediate sense.
For Flash to work in any Windows browser not based on IE, somebody has to install the separate NSAPI flash plugin.
The extremely wide spread of IE toolbars and other ActiveX plugins shows that Google will garner installs. They'll probably also have the OEMs they're paying to bundle Chrome install Chrome Frame too.
Hell, they might even stuff it into the Google Toolbar for IE -- which has tens of millions of mostly paid-for installs.
But their IT departments can install it. Those IT departments usually want to upgrade because they have to write internal web apps and they feel the pain, too. But they can't upgrade due to various legacy apps that are tightly coupled to IE6. This lets them have their cake and eat it, too.
http://rickonrails.wordpress.com/2009/09/22/chrome-frame-ain...