I was actually testing one of my own scripts, expecting an alert() dialog to appear and for a few moments I didn't think it had worked, in fact I thought it had wholly broken since I couldn't click on anything - it was frozen. Then I noticed this subtle box at the top of the window - I had to double take!
I am perplexed as to why Google have made this change? Do they honestly think it is an improvement?
Hhmmm... Chrome didn't update afterall it seems... I happened to be using a Windows Vista laptop and noticed the thick, colourful border around the alert box (still at the top of the window) - and this remains (just checked). However, my XP machine is still the same subtle/grey alert box. Both versions of Chrome report the same. Weird.