From the FAQ:
Apollo is a cross-operating system runtime that runs outside of the browser .... We ... are confident that we will be able to quickly get significant distribution of the Apollo runtime.
Apollo will provide a set of APIs to make it easy to develop connected applications that work while offline.
Update: Niall Kennedy posts a detailed review.
Update: Two months later, video of a Google tech talk, "Flex, Flash and Apollo for Rich Internet Applications", is now available that includes several lengthy demos and gives a good feel for the product.