Now what would be incredible is if Google made Wifi Mesh hotspots.
Here is how I would build it. Create a wifi router that has 2 WAN uplink ports. Wire 1 WAN uplink port to something like the Vyyo v280 700Mhz Wireless Modem. Configure the Vyyo v280 700Mhz Wireless Modem for Mesh Networking with other Google Hotspots. the second WAN uplink port would be to connect internet to if you have it (say at a library). The Vyyo V280 modems have a range of 8 miles.

Here is the use case.
You have a cabin just outside town. you are out of reach of DSL (3 miles from CO) and cable internet is not offered in your area. 3G is not availible at the cabin. Now steps in the google hotspot. You know that the local library has a Google Hotspot to share thier free internet. They library is only 6 miles away. You buy a Google Hotspot, and are able to connect to the library and get online. The hotspot transmits wifi all over your house, so no cables needed nice Bounus and you have internet where otherwise your out of reach.

The hardware already exists, but only as seprate componets. This could revolutionize poverty\rural areas with limited\no internet access.

Q. Why does the Library provide free internet?
A. Because they already do. A 2006 survey found that "72.5 percent of library branches report that they are the only provider of free public computer and Internet access in their communities. [1]

Q. Why choose Libraries?
A. They are everywhere, and open to the public. A 2008 study found that "100 percent of rural, high poverty outlets provide public Internet access. [2]

Q. How can google make money to pay for research, development, and setup pilot programs for the google hotspot?
A. Use Google adsense built into the hotspot to help direct advertizing based on user searches, and\or websites visited. Google could also charge a small fee, say $5 a month plus cost of device. With this money, google could use it to subsidize or improve internet connection speed at each library and pay for development costs.

[1] Bertot, J.C., Jaeger, P.T., Langa, L.A. and McClure, C.R. (2006). "Public access computing and Internet access in public libraries: The role of public libraries in e-government and emergency situations." First Monday. 11(9)Retrieved May 30, 2009, from http://firstmonday.org/issues/issues11_9/bertot/index.htm

[2] Bertot, J.C., McClure, C.R., Jaeger, P.T. and Ryan, J. (200. Public libraries and the Internet 2008: Study results and findings. Retrieved May 31, 2009 from Florida State University, Information Use Management and Policy Institute Website: http://www.ii.fsu.edu/plinternet_reports.cfm