At least half of Google's Checkout service has been opened up to countries other than the United States. Now, regardless of where you live, you can purchase items with Google Checkout -- unfortunately, finding a store that will ship internationally is quite challenging.
One place that is accepting money from other countries already is Google's own Picasa Web Albums. You can now upgrade your account even if you don't live in the United States. You will also notice that Picasa Web Albums is no longer labeled "TEST" on their logo.
The only thing left for Google to do now is allow international merchants. Once this happens, PayPal better watch out -- assuming they aren't already.