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Two, if you put a second ARM CPU in a notebook that is dedicated to running Chrome OS, you can dramatically increase battery life over the use of an x86 CPU, depending on which one. If you imagine a gaming notebook with a large battery and a dual- or mixed-CPU, dual-OS set-up -- just as an extreme case -- a battery that would last a couple hours while using a high-end x86 CPU would last, using an ARM CPU, 8, 10, maybe 12 hours (I'm just guessing). Theoretically, for the added cost of less than $200 (i.e., less than the cost of a low-end ARM CPU netbook), one could have a gaming or desktop-replacement notebook with additional netbook functionality. Instead of getting a notebook and a netbook, you can get a notebook + netbook.
Finally, the speed of the boot-up has a lot to do with optimizing the actual use of the OS. Imagine that you have to look at an email attachment from work, like a file with 10,000 lines of text or an enormous photo, and then, depending on the end-point of that process, you might have to get on Photoshop, Mathematica or Power Point, download a large file from a server, etc. Google is suggesting that this kind of scenario, in their experience, is extremely common. The fastest way to achieve this task would be to boot up your instant-on OS with the fast, fully web-compatible, file-compatible browser, and then, only if you have to, boot up your main OS. That sequence makes sense only if the secondary OS is faster from start up and shutdown than the time it takes to boot up the main OS, establish a network connection, start the browser, and shut down the main OS. It makes even more sense if it's faster than the sequence when the main OS is in sleep or hibernate mode.
I think critics are missing the point that an instant-on, internet-only secondary OS that dramatically increases battery life by running on a "minimal" CPU is a feature that competes well with other features, like a large capacity SSD, a Blu-ray optical drive, an extended battery, or massive amounts of RAM. They're all ways of altering and improving the overall usefulness and versatility of a notebook that can cost a fair amount of money. A free, zero-maintenance OS with updates fully managed by Google, a few GB of flash memory, and an appropriately spec'ed ARM CPU wouldn't cost all that much for a notebook manufacturer.
I'm not saying that the only usage scenario in which one can imagine Chrome OS working is on a notebook with a dual, mixed CPU design. But it definitely to me seems like a winning idea. Someone else could do an instant-on OS better, and Google wouldn't care, since they make money each and every time someone uses the internet on any OS or any browser, apparently.
Regarding the Windows 7 startup time, with Chrome OS, Google is directly trying to address the "bloat" that accumulates through the life of an OS. The startup times for Windows 7 are presumably as fast as they're going to be right now.
Re: standby, it requires a small amount of power, a notebook can't be left unplugged on standby indefinitely, and it's vulnerable to power loss. Hibernate doesn't require power but takes longer than standby, depending on the speed of the main drive and the amount of RAM being used.