I have been writing for a while the enormous value of the social graph that resides within email. Finally, Google has made a very significant step to capitalize on this. Frankly, I was expecting Yahoo to beat Google in this race, primarily since Yahoo has to do something bold at this stage and the gigantic installed base of Yahoo Mail users. I suspect they still might but Google looks like the early bird this time around.
Gene Volovich commented about the walled garden aspect of Gmail. I agree with him. However, Google is learning to be open. In fact, anyone looking at Twitter would understand that it was its openness that led to Twitter's growth. The only way for Buzz to fulfill its destiny is to be open. I have no doubt Google would know this.
For me, the bottom line is, for a gmail user, the amount of social insight residing in gmail far exceeds facebook. This may not be true for users who split up email usage for personal and professional communications. However, Gmail usage brings habits with it and if you deal with your professonal email through the Gmail interface, the conversation threads are very natural. And the status updats/tweets context is identical to the conversation thread. In a funny way, the Gmail model, when established, already laid the foundation for Buzz, way before Facebook statuses or Twitter.
I see Google Buzz as a very important step (and experiment) in social communications, and a strong move by Google in the race to own the identity layer of the internet.