Basically, the bar elucidates the three 'states' in which you can use Google's services. First this is 'Unidentified,' which is where Google only knows your IP address, tracks you with a cookie, but doesn't know your name; then there's 'Psuedonymous,' which is how most of us currently use Google -- and finally there's 'Identified,' which is where your real life identity is assured.
Interestingly, Google also answers a question we've always wondered about: when you're logged out, you are effectively anonymous -- even if your IP address matches one of your Google accounts, your surfing habits are still kept separate.
The navigation bar, then, is simply a way of making sure you always know just how private (or public) your actions are. It's worth noting that the nav bar might still become a part of the upcoming '+1' social layer -- but for the time being, we can only guess at how they might be combined.
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