This is how it is “supposed” to work:
After deciding to use GMail as a mail server, the first step would be to add an MX record pointing to mail.google.com in the DNS for a domain “” effectively routing email directly to Google for it. … There will be a tab to manage domains “” giving (users) the ability to link domain(s) to (their) account.
The post goes on to mention that Yahoo! has its own mail-hosting service for small businesses, so Google might be going in the same direction. The only snag, I think, in this service is the p-word: will there be an agreement that safeguards the subscriber from being subject to Google’s crawlers (seeing as how Google keeps track of your searches, mails, and now, chats)?