Does anyone know when this started ?

I am noting that webclips is directly harvesting from my Reader subscriptions. (without my reader app being opened at all!!)

http://slash.pd.googlepages.com/clip1.png

As such, why do I need a reader now.. ??

Isn't this just Google Desktop at work rather than Google Reader?
  
I don't use it, but I thought it just subscribed to the feeds from any website you visited...?

Agreed, that the sites (with an RSS feed) that are vsitied will be piped into Clips.

but, what about the sites that I have never visit and only take the RSS feed in my reader ? how is that popping up in Clips ?

/pd Google Reader has a Feed (for your items) too.

Since you visit Reader, Web Clips subscribed to its Feed.

==>> "without my reader app being opened at all"

Sohil, reader was not opened

/pd

there is no need of the app to be opened.....since you have webclip in your personalized homepage by which you are logined to google accounts and so it takes from google reader...