In an LA Times article Google states
We are excited that much of the technology in Gears, including offline support and geolocation APIs, are being incorporated into the HTML5 spec as an open standard supported across browsers, and see that as the logical next step for developers looking to include these features in their websites
We’re continuing to support Gears so that nothing breaks for sites that use it. But we expect developers to use HTML5 for these features moving forward as it’s a standards-based approach that will be available across all browsers.
I know that they say they will continue to support Gears so that it doesn’t break applications, but for how long? I don’t personally use Gears nor have I written any applications using Gears but I do know some of the Lotus Bubble bloggers have.