Update: Google "music service" sounds more like an affiliate link program. Yawns ensue.
No, apparently Google is not planning something that "big." Rather, they're working to add functionality to Google Search. And by functionality, I mean something that sounds like revenue-generating links for Google without the complexity of creating a digital storefront.
According to an update from CNet, One Box will add links to existing digital music services like iLike and Lala. You search for a musician, album, or song title on Google - you get artwork thumbnails, playable audio clips, and links to buy tracks alongside your search results. iLike, of course, already embeds YouTube videos for songs people search for (example), so this is a bit like "you scratch my back, I'll scratch yours."
To me, it also sounds like referral bucks for Google. It's closer to their core competency (search and advertising) than rolling out a full-blown iTunes competitor. And they can always buy iLike or Lala later on if things are going well. Google does love the acquisitions.
I don't know about you, but I'm way less excited about this than the original TechCrunch rumor. What do you think?