I think i heard this rumored before, but I got a Google Press email about this now, so it's official i guess.

<<<As you may know, for every $1 you spend on AdWords, you can process $10 of Google Checkout sales for free. Just in time for the holidays, we're giving you even more by processing all of your Google Checkout sales for free through the end of 2006! Here's how it works:

From November 8 through December 31, 2006, we'll process all of your Checkout transactions for free, even if you aren't an AdWords advertiser. If you're already an AdWords advertiser, we'll process your Checkout transactions for free regardless of what you spend on AdWords.*
Valid Checkout orders you receive during the promotion will automatically qualify.
There's no limit: we're processing all of your Checkout sales for free.
You can take full advantage of this promotion by encouraging your buyers to use Google Checkout on your site. >>>

If I where Google I would make donations via Google Checkout (to OpenSource and charity) free forever!

And I would integrate it with adsense/adwords and launch it world-wide.

yeah this was in the pipeline. I noted here

http://blogoscoped.com/forum/74264.html