Ok, so let me just say that I definitely called this one about 9 months back when I saw this as a LABS feature in Google Webmaster Tools!  Site SPEED is now a FACTOR in the Google Algorithm!  Your SLOW sites now need to be optimized for SPEED! The faster the pages load, the higher your rankings! I have been working on this on my own site ever since I first predicted this day. You may not WANT to migrate your site to a faster server, but when your rankings drop you’ll now know why! This can be done by reducing the amount of external requests off of your site, reducing the number of stylesheets, minimizing the size of your images to just BARELY be not fuzzy looking and several other things! These are just off of the top of my head… but you need to start considering this for rankings!

via Official Google Webmaster Central Blog: Using site speed in web search ranking.