I don't think anyone saw this coming:
While we’ll be working on new things at Google, we will continue to make Sparrow available and provide support for our users.
That doesn't bode well for the current Sparrow apps as we know them. This is almost certainly a talent acquisition by Google.
Update: Sparrow just sent an email to all it's customers, in it they confirm the Sparrow apps will no longer have any new features released:
We will continue to make available our existing products, and we will provide support and critical updates to our users. However, as we’ll be busy with new projects at Google, we do not plan to release new features for the Sparrow apps.