Federated Login has been a "holy grail" in the identity community for a long time. We have known how to do the technical part for a long time. However the industry has constantly tried, and failed, to find a model that was (1) simple for end users, and (2) had a reasonable trust model between the RP (the relying party, which is the site you want to log into) and the IDP (the identity provider, who will identify you to the RP). Google has been experimenting with different user interface models for federated login that focused on usability, especially for websites that have a mix of users who use federated login and users who have traditional accounts with passwords at the site.
To test the demo, try logging in with your email and make up a password. Most browsers will ask you if they should remember that password so approve that request. Now close the window, and visit the demo site again. After you enter your E-mail and click Continue your password should already be filled in. Now close the window yet again, and visit the demo site again. This time enter an email address in a domain hosted by Google, such as firstname.lastname@example.org (for consumer users) or email@example.com (for enterprise users) and in both cases you should get redirected to the login page (or if you are already logged into an account on that domain you will just see the approval page). If you try this with a Gmail account, you can choose the RememberMe option on the approval page. In that case, if you restart your browser, visit the demo site, and type your Gmail address you should be invisibly logged in.
There is some fairly well documented code that implements this. When you read the code, note how we're trying to make it as easy as possible for the user in both cases - the OpenID and the "legacy" (password) case, by handling tab orders, etc. A legacy user would visit the page, and depending on their browser would either already see their username filled in, or would have to start typing the username and allow some form of autocompletion. Then they hit Enter, which causes the password field to be displayed with the password pre-filled-in. Then they hit Enter again, and they are logged in. That's only one additional keystroke compared to a login box that's purely aimed at legacy users.
OpenID users typically have to type their email address (unless their browser has some more advanced form-autofill-features beyond login boxes), and hit Enter. Depending on their IdP, they may or may not have to interact with the IdP. But hopefully, they are already logged into their IdP, and have things set up so that they don't need to approve each login request, so that hitting of Enter should be all that's needed to log the user into the RP.