Update: As expected Ogle Earth does an excellent introduction to ‘Google Earth 4.2′

One pointer that users should be aware is that it now supports KML 2.2 (beta)
http://code.google.com/apis/kml/documentation/kml_tags_beta1.html

now includes:

• ExtendedData (replacement for metadata)
• Atom feeds
• AbstractView
• ResourceMap
• PhotoOverlay
• Google Earth release 4.2, video is supported!

Official post on this http://google-latlong.blogspot.com/2007/08/sky-final-frontier.html

Google Sky is an addition to Google Earth New!

You will need to download the newest version of Google Earth to use it.
version 4.2.0180.1134

http://earth.google.com/download-earth.html

More info
http://news.bbc.co.uk/1/hi/technology/6955787.stm

Works well so far - but only had 10 minutes…

The Google Sky button is here on the new version.