I don't buy the notion that Chrome is a major competitor to Internet Explorer. The people who use IE are generally either forbidden from using anything else by their employers or are mainstream users who either find that IE -- which came pre-installed on their PC -- works well enough or simply aren't aware that alternative browsers exist.
I think Chrome could end up grinding the life out of Firefox, though.
Cnet points to a blog post from Mozilla's CEO who tries to whistle past the graveyard, but I thought the critical point from Cnet was this financial tidbit:
Mozilla and Google have had a long and very fruitful relationship. Google is the default search engine on the Mozilla Firefox browser, and the company pays Mozilla large sums for the privilege: $56 million of the $66 million that Mozilla Corp. made in 2006.
That financial arrangement expires in 2011, and I don't see any reason for Google to extend it beyond that point, assuming Chrome isn't a total flop.
If Google does cut its ties with Mozilla, it's hard to see Firefox surviving for long unless Mozilla comes up with a radically different business model.