You know, that actually makes a lot of sense. Apple, in my opinion, is EXTREMELY creative, and a leader of the pack when it comes to pulling together cutting-edge technologies in ways that we'd never even think of with wonderful results.
Perhaps Apple sees it as ridiculous to have a web browser as a stand-alone application. Could Sherlock evolve into a multi-faceted search application? You could browse the web, search your hard drive, and look up an old high school buddy with an on-line yellow pages all from the same application. Kinda like Watson with an integrated browser?
Apple is the leader of the "digital revolution," or whatever name you want to place on it, and so far their applications have gone above and beyond what they seem to be on the surface: iTunes - manage your music, as well as manage your MP3 player (iPod) AND burn CDs. iPhoto - manage your digital photos, as well as organize them, order a printed book, and email them. iMovie - well, that's kinda self-explanatory, but it's still the easiest and most intuitive way to get the job done.
Apple has a way of taking something that other people have made WAY too complex and turning it into an everyday, simple, intuitive thing. Browsers seem the next thing... cookies? Site passwords? Helper applications? My brain is fried! Apple -- take Sherlock and help us out with this!
Ok, I'm not known for wild speculation, or even gabbing about rumors. Frankly, I sit back and wait and don't get my expectations up, and I'm impressed every time Apple gives me something new to work with. However, when lonny mentioned Sherlock, HTML, and Apple browser all in the same sentence, it made a lot of sense to me. Sherlock would be a MUCH better name than iSurf or iWeb or iAnything -- more professional, more fitting -- since Sherlock evokes images of "searching intelligently," and that's exactly what you're supposed to do with the web. Somehow this is just clicking in my head...