Apparently Google wasn't too keen on tackling potential patent issues that would come with h.264 support and opted to support WebM (VP8) and Theora instead, which in their opinion, are far more open - though one might argue they are less performant than h.264, but that's a debate for another sub-forum, I believe. Flash (which uses h.264) support will remain, though.
As it stands now, I think IE8/9 is the only in-dev browser with h.264 support...
Other browser news I caught lately was that MS was tailoring IE9 Beta to take advantage of AMD's new Fusion CPU/GPU combo (otherwise called as APU - Accelerated Processing Unit) in order to deliver better, faster graphics and page rendering on-screen...right in time for the release candidate, which should be released quite soon ("early 2011").