No, it’s not a new service provided by Google — it’s a Ning app built on the Google Search API. The functionality is simple. You feed Google Related Pages a URL, and it gives you back a list of related webpages. The data is collected using Google’s ‘related:’ operator. I have found in tests that it gets pretty good results when used on popular pages, but not as well when used on less popular ones.
So what is the point? Why use this instead of just doing a ‘related:’ search on Google? Isn’t this just a nicer interface to something we could already do? Not quite. You see the app also generates RSS 2.0 and JSON(P) feeds of the results. Ultimately that is the point. Results can be integrated into pages, such as blog sidebars, or watched in feedreaders. Because the data is all in the Ning app, other formats will be easy enough to add if people want them.