I first saw this in an excellent Creative Bits post yesterday and have since been playing with it. It is truly jaw-dropping! Here's one I whipped up myself. The service isn't quite perfect, for one thing it's very hard to bring up information bubbles for buildings you recognise, and the search function itself is pretty flakey. Also after 20 minutes of fooling around with it caused Safari to start behaving strangely (clicking in the search box wouldn't make a cursor appear). But considering the satellite firm Keyhole was only acquired by Google in October, it's still pretty impressive!
Update: this site uses a similar technique, but on a 2.5 gigapixel landscape photo instead of satellite imagery.