If Microsoft does this right, they've pretty much just killed the browser as the de facto means for rendering web-based applications. The browser is now Notepad to the Windows 8 application stack's Word. The browser will still serve its purpose as a "utility viewer" for the web, but real applications delivered over the web will no longer have to be through the browser. Windows 8 OS itself does this now. It's like Chrome OS on steroids.
To the user, what difference does this make in terms of convenience? You search for a website. You click a link. The browser downloads literally thousands of files that get cached locally, and these files render in the browser's window frame.
In Windows 8, you search for apps in the store. You click a link. The application downloads locally, and Windows runs the app.
The irrelevancy of the browser was already fast approaching because of the advent of web services. IMHO, Windows 8 will accelerate this further.