95% PC's of the world runs on Vista and XP still. Google is developing Andriod as a OS to compete with Microsoft's windows. More so Google is making a Linux based OS which will have many advantages over Windows like modularity ( Windows is monolithic OS), more secure ( As it is Linux based).
So will Microsoft loose its dominance in a few years or a year. Only time can tell us.
Meanwhile its good to see an open source attempt at OS. I am sure Google has a good brand equity and any product that Google creates will surely be up to the mark and best in the market.