For example, if I search for [engadget], at the bottom of the page, I see:
Pages similar to: www.engadget.comThe similarity algorithm also appears to have changed, with noticeably better quality in the spot checks I did.
Gizmodo ... gizmodo.com
Ubergizmo ... ubergizmo.com
Wired ... wired.com
Lifehacker ... lifehacker.com
This is a fairly big deal. Similarities based aggregate behavior and targeted to the immediate context is a big step toward personalization. The next step is to tie the data to individual history and target similarities and recommendations both to the context and each person's past history.
Google has done a version of personalized search for some time, but the technique used mostly was based on biasing search results toward people's long-term interests. More recently, they also started boosting previously clicked search results to help support re-finding.
Google's latest move should let Google add fine-grained personalization based on current missions and short-term trends, which, in combination with their current search personalization, is likely to improve Google's ability to help people find what they need.
Update: Here is the announcement of the new feature on the Official Google Blog.