According to the developers, the size of the data in this format is obtained on average by 39% less than the source in JPEG, with no visible loss of quality (statistics from a random sample of a million images stored by Google).
The format is based on the RIFF container and uses the VP8 codec. This preview release does not support alpha channel, but it will definitely appear in the future. In addition to working on various improvements, a patch for webkit is being developed to provide native support for this format in Google Chrome.