According to Brulant, 1 out of 10 surveyed online merchants are using Google Checkout, in comparison to last years 1/20. It's still unclear how popular Google Checkout actually is though -- the study doesn't provide much detail as far as the actual numbers are concerned. According to the same study, PayPal saw a 217% increase in their adoption between February and December of 2007.
It will be interesting to see what happens now that Google's payment processing fee is no longer free. That was one of the main reasons most online merchants decided to give it a shot. Unfortunately, right now only the US and UK are able set up a "seller" account through the service, and there is no information available that gives us any indication of when they will expand to other countries.