Basically, Eclipse Labs will attempt to be the official (yet unofficial) hosting site for Eclipse-related projects that either don't want to go through the IP due diligence and development steps required by an Eclipse 'Foundation' project, or can't be a Foundation project because of inherent incompatibilities such as licensing. One example of an incompatible project is Doug Schaefer's Wascana project. Wascana is an Eclipse C/C++ IDE for Windows developers, and because it uses a MiniGW-based GNU compiler it's partially licensed under the GPL, which means it can't be hosted or distributed from eclipse.org due to GPL restrictions.
The concept of Eclipse Labs certainly sounds better than having your Eclipse plugins (or OSGi bundles) scattered among the various forges (Google Code, SourceForge, Codehaus, etc.). Eclipse Executive Director Mike Milinkovich explains:
"Creating an Eclipse project on a forge makes it difficult to gain visibility in the Eclipse community. Can we find a third option that allows projects to start and prosper without the process of the Foundation but at the same time gain some of the visibility Eclipse projects often get by being at the Foundation?" --Mike Milinkovich
Of course, in order to become that "third option", the Eclipse community at-large will have to recognize Eclipse Labs as the de facto site for non-'Foundation' Eclipse projects. My guess is that it will catch on… big time. Why? Because so many people love Google's stuff, and they admire the Google brand - Java developers included. Just look at GWT and App Engine.
Eclipse Labs will allow Eclipse projects to highlight add-ons at Eclipse Labs that are relevant to that project. There are also plans to populate the Eclipse Marketplace with Eclipse Labs projects. The site will be very familiar to users of Google Code. It uses the same issue tracker and version control (Subversion and Mercurial). Git support should be available in Eclipse Labs once it is rolled out to Google's hosting infrastructure.
Several projects have already migrated to Eclipse Labs. The first to migrate was Workspace Mechanic, a public version of the tool that Google uses to automate Eclipse workspace maintenance. The Project Hosting Connector for Mylyn is also on Eclipse Labs. It's an Eclipse plugin for the issue tracker built into Google Project Hosting.