Google has just launched their travel planning initiative (see website here HERE). Currently site unfortunately supports only US flights. All the major travel sites were down yesterday in the beginning of the trading day following the announcement.
I ran a quick test and compared the site with Expedia. I set up a travel route from LA to NY departing on 1st of Oct and returning on 8th of Oct. Expedia found me a flight that cost 258 USD (Continental), Google 289 USD (American). So I guess Google might not have so many deals with different airlines yet.
However the best feature that Google has is displaying the cost of flying from a selected destination to other cities. Just look at the following map (click to enlarge). So for example from LA to Denver it costs 159 USD to fly on these dates. Can't wait for this feature to be available in Europe since planning multiple destinations can be a real headache.