"There is only one time in the history of each planet when its inhabitants first wire up its innumerable parts to make one large Machine. Later that Machine may run faster, but there is only one time when it is born.
You and I are alive at this moment.
We should marvel, but people alive at such times usually don't. Every few centuries, the steady march of change meets a discontinuity, and history hinges on that moment. We look back on those pivotal eras and wonder what it would have been like to be alive then. Confucius, Zoroaster, Buddha, and the latter Jewish patriarchs lived in the same historical era, an inflection point known as the axial age of religion. Few world religions were born after this time. Similarly, the great personalities converging upon the American Revolution and the geniuses who commingled during the invention of modern science in the 17th century mark additional axial phases in the short history of our civilization."
I see the web as distributed intelligence as well... but ants are also a collective intelligence and I haven't heard anyone waxing poetical about them. We can gain great understanding of our own behavior by observing clustering and learn from others we might choose to emulate; we can make each other smarter through our own sharing of information; and as much as we observe the blogosphere it is patently ridiculous to call it a "mind".
There are deep flaws in Kelly's analogy - stolen from Kristina Lerman and Francis Heylighen - between hyperlinks and neural synapses - not limited to the complex interactions and regulations of neurotransmitters, their reuptake in the synaptic cleft, and second messenger systems. People making these analogies are, not surprisingly, physicists and mathematicians attracted to biological metaphors - not biologists, who would refuse the trivialization of these systems into one-way hyperlinks.
So let's leave well enough alone - Web 2.0 is fine and it makes good sense to build new companies and technologies around the capability of each user to add depth, content, and behavior to the application ... but let's leave biology to biologists, religion to theologists and keep technology where it belongs: in the domain of tools and not spirits.
Now, back to technology...
Don Dodge writes very insightfully about Web 2.0 - if you haven't checked out his blog yet, you should see what a veteran of Napster and Groove has to say about where it came from and where it's going.
Rick Segal of JLA Ventures has a funny, on-point perspective on the hype for startups and VCs ("Web 2.0 != a check").
Cliff Reeves has his own commentary on Tim O'Reilly and Rick Segal's opinions...