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There's two kinds of apps going on here, and I think it's pretty anecdotal for why this probably wont be as transformative as fb's social graph (it's an apples vs. oranges comparison anyway). Google always builds the engineering app not the social app like they did with wave/buzz. This WILL be useful for people who are building the examples google talks about here http://googlemobile.blogspot.com/2010/05/do-more-with-google... like turning off and on your lights when you get close to house etc.

but as usual, google only understands the engineer and focuses too much on utility and not enough on people.

There are somethings people do in fact WANT to check into (ignore the privacy issue entirely for now, just from a visceral product level), not just have automatically imported because the act of checking in is in and of itself an act of projecting identity. People who want to show what bar they are at because they are showing that they are cool want to press a button and get the reward right there of "I'm cool." Knowing that your phone is projecting that automatically wont give people the same rush as showing up at the bar and checking in.

But I don't see anything here that blocks the "check in" approach, if anything, it makes it easier to implement. Instead of needing to develop your own app for each mobile platform and using their location API, you just make a web page that asks for confirmation to access the user's Google Latitude location, and all you need to do is develop the interface for whatever human provided info you want. The location pick up is taken care of. (Of course, I don't know how this compares to just using HTML5 location APIs... perhaps that provides a better approach for check ins.)

The only problem I see with this is that, in my experience, Google Latitude 95% of the time tracks location by cell tower, which doesn't even narrow down which block you are on, much less which bar you are in.

Now the user has to manage their privacy for a bunch of apps through Google's central server instead of the app itself, and the app now needs to talk to google as well - seems like kind of a drag to me. Extra moving part for dev, and for user kind of like having settings for a game in your system preferences, sure it works but it's a bit odd.

And the cell tower problem too, which I didn't know about.