Timid men prefer the calm of despotism to the tempestuous sea of Liberty.

I think it is interesting the political angle that many news reports are taking on this, with regard to the motivation of the project. An example from the Drudge Retort (the name says it all) is fairly typical of news reports I have seen:

If successful, Galileo will end Europe's reliance on the GPS system, which is ultimately controlled by the US military...

Last year, US President George Bush ordered plans for temporarily disabling GPS satellites during national crises to prevent terrorists from using the technology...

Galileo is under civilian control. The European Space Agency says it will guarantee operation at all times, except in case of "the direst emergency". It also says users would be notified of any potential satellite problems within seconds.

To me, this makes it sound like Galileo was dreamt up last year as a way to retaliate against the Americans for turning off GPS. But the fact is that a project like this is not clumped together in a few months, from concept to launch. Galileo has been in the works for years, and for several reasons. During the Clinton administration, there were already questions of why Europeans were considering a duplicate system, but the fact is that Galileo can be used in ways GPS cannot. GPS is accurate to within about 10 meters for civilians, and about 3 meters for the US government. Galileo will give accuracy to about one meter for those with free access to the system, and down to centimetres for paying commercial users. Also, GPS would need to be upgraded before it can be used for some of the applications the private sector has in mind. Boeing and Airbus have been angling for years to see the system handle “free flight” in which each aircraft finds its own route clear of other aircraft, without the middleman of radioing controllers on the ground.
As a 2003 Economist article on Galileo noted, GPS needs more spending to upgrade it to handle applications in which lives could be put at risk, such as in air traffic control. Who's going to pay for that? The same article also notes a suggestion by David Braunschvig of Foreign Affairs magazine:

the Pentagon hives off the military version and develops a separate commercial system to compete with Galileo. In an emergency, they could act as back-up for each other. At the moment, the commercial services based on free access to GPS have revenues estimated at around $12 billion, with no return to the American government.

And although it will be owned and controlled by the EU (not China, you conspiracy theorists!),

Galileo will be in part a commercial system. A concessionaire will get the right to operate the system for a fixed period in return for plunking down two-thirds of the deployment costs—around €2.2 billion.

Bring on the satellites! Bring on the market!