Q: Firefox is already a great browser AND it's open source. Why didn't Google just invest changes into this browser?
A: Chrome isn't simply another Mozilla-fork, it has new low-level system features and architecture. Firefox is a great browser, and it's pushed Web 2.0 far enough to expose some serious problems in the underlying design of Web 2.0 and the browsers that support it. Changing Firefox just isn't practical when there are this many changes... it's better to start over.
Q: "Separate Processes" per tab? Why is that necessary?
A: The browser and web based applications are hostile territory. You can't trust that applications developers are going to write friendly, clean, compatible code, so don't trust them. This sounds counter-intuitive until you realize that all the rock-solid architectures do this: IP works because it fundementally assumes that communication failure is NORMAL. Likewise, modern operating systems believe in process isolation. It's a "good thing"(tm) that Google is now doing the same for the browser.
Q: Do we really need another browser?
By the way, people have said the same thing about Opera for a long time, but the truth is that Opera pushed both IE and Firefox towards better CSS 2.0 compliance when it beat them badly on the ACID2 tests. Likewise, there are serious problems with current browser architectures that have not been addressed that Google is now addressing.
More competition is never a bad thing because it motivates exactly these kinds of changes.
Q: So great, now I have to design for another browser as well?
A: Unfortunately that particular problem will never go away anyway anytime soon-- we already have at least 3 major browsers (IE, Firefox and Safari). The truth is that a certain segment will always push the latest browsers and gradually the rest will either move towards compatibility or lose market share as those sites become popular.
Q: So why use it before it becomes popular?