The basic observation is that many things are much harder on a network of machines than they are on a single machine. For example, system administration is much harder on a network of, say, a hundred machines than it is on a single system. It is also much harder to share resources effectively, to provide a consistent environment to users, to keep a good handle on security, and many other things. Furthermore, the bigger the network gets, the harder the problems get, and solutions quite often don't scale. So, what we're doing is building a system that makes a network look like a single system, to simplify many of those tasks.
Administration is simpler because there is only one system to manage rather than many.
Resources may be shared much more effectively because the entire network looks like a single system with a single set of resources. The user's environment is consistent across the network because the network is a single integrated system rather than just a collection of independent machines strung together by a physical wire. Linux NOW is related to Debian in that Debian provides its foundation and core infrastructure. That being said, Linux NOW is basically a set of programs and modifications to the kernel, so there's nothing in the design that would prevent it from running on other distributions. We decided to use Debian as the base for Linux NOW because it provides an excellent foundation and core infrastructure.