Basically, what it means is that you can get the same service previously available through e-mail alerts within your RSS reader. You can create alerts that will notify you any time a Web page, blog site, news story, or video pops up with a specific set of keywords — and now, you can have that information delivered via RSS.
Google’s Jaime Forman-Lau also says some new under-the-hood improvements will also make the alert deliveries quicker than they had previously been. Another change will deliver images within the news alerts, which didn’t used to occur in the e-mail service.
(Google Alerts can still, by the way, be delivered via e-mail if you so choose. That’s still the default, if you don’t select RSS within your Google Alerts management page.)