The beta release of Google Desktop 5 was just announced on the main Google blog as well as the Desktop blog.
A complete overview of the new and existing Desktop features is here. The most important change is that users now have the ability to preview files in search results directly in the application or browser, which is a time saver. They’ve also upgraded security and redesigned the widget features.
We last covered version 3 of the product, which was released in February 2006. That was the first time Google started (optionally) storing your hard drive index on Google’s servers instead of locally on your own computer.