Google proves it can make a better beta with the latest release of its browser, Chrome 2.0.

The new Chrome 2.0 beta leaves the likable interface pretty much alone and focuses on speed and functionality – at least if you are not running Microsoft Windows 7 beta.

Testing the product beta with Windows 7 showed a marginal increase in speed and some features just didn’t work – like the new side-by-side view. Side by side is one of the most significant new features of Chrome – side by side enables a user to drag tabs down to create what amounts to a docked window, with that tab’s contents. Side-by-side is a feature that heavy surfers will come to love very quickly.

Under beta Windows 7.0, side-by-side did not work and we experienced a few lockups, crashes and had other features not work as expected – such as the new auto form fill.

Switching to Windows Vista made all of those problems go away.

In Vista, Chrome 2.0 beta feels significantly faster than Chrome 1.0, and more importantly, Internet Explorer 7.

When running the Chrome 2.0 beta on Windows 7, the speed improvement over Internet Explorer was not noticeable. Other new features include zoom, autoscroll, form autofill and the aforementioned side-by-side view.

With Chrome 2.0, Google is clearly on a path to challenge Microsoft for browser dominance. That said, Microsoft still holds the trump card when it comes to running Active X and VBscript code within a browser – an important capability when it comes to running Microsoft products such as Outlook Web Access and some .Net applications.

While Google’s target is clearly Internet Explorer, the real test will come when the product is put up against Firefox, which has found its way onto a multitude of desktops and has become the browser of choice for many businesses and personal users.