The Google Developers site has more details on publishing a folder as a website. Essentially, besides having the folder and site assets public, you also need to link to the files in the folder using a "webViewLink" code. If you don't have an index.html file in the folder, Drive will display a list of the folder's contents.
This could come in really handy if you don't want to spring for your own web hosting. You could do things like publish a photo gallery, an online resume or a personal start page. There's no word on bandwidth or other limitations yet, but you can keep an eye on the discussions on Stack Overflow if you have any questions.
Announcing Google Drive Site Publishing [Google Apps Developer Blog]