Wednesday Update: The Google v MS faceoff is about two fundamentally different approaches to place representation today. Google Street Views is using “movie maps” while MS Live Search is using 3D maps.
Moviemaps are 2D movies, insofar as an illusion of movement is created through visual similarity of adjacent 2D images. You can only “travel” around what was pre-recorded (!) and you can’t change anything.
3D maps are 3D databases (like most video games) and allow unconstrained travel and manipulability.
These approaches are fundamentally incompatible today, and involve such challenges to overcome as camera pose and geometry determination, scene interpolation, transient object and shadow removal, and reflectance modeling (“BRDF”s). There’s also the deeper question about what to do when no data exists (fake it or constrain POV?).
3D will win over 2D, if only because it compresses the massive redundancy of so many images which look so much alike, but not the day after tomorrow. There's plenty of room for creative hybrids. But for now, brace yourself for a lot of hype pitting one approach against the other.

Today Google is launching a new feature on Google Maps called Street View, by far the best of the MS/A9 style "moviemaps." Several cities are mapped so far, including NY and SF. Particularly nice are the graphic overlays, the dissolves from view to view (simulating forward/backward motion) and the cinematic "pans" when going through intersections (doable since everything was filmed panoramically).
Street View is integrated into Google Maps as a stand-alone feature and is entirely 2D, made up of thousands of panoramic 2D photos. Dimensionalizing 2D into 3D to seamlessly integrate into Google Earth presents several challenges.
An noteworthy feature, which may present additional challenges, is here:

UPDATE: Today Microsoft also announced an upgrade on its Live Search Maps of "photo-realistic 3-D imagery" of several cities including NY, "Superman" perspective not street level.
BUT WAIT THERE'S MORE: Today, EveryScape Inc., a Massachusetts-based startup which has been working in stealth mode, also announced photo-based street level mapping, which includes user participation.
Part of the madness is because Where 2.0 began today. But as of noon various blogs are reporting some but not all 3 announcements. Crazy!