It looks like google reader has been given a new facelift according to Jena Bilotta from the google reader team. Its main purpose is to speed up google reader.Most of the clutter that used to be at the top of the reader has been taken away giving you a larger viewing area.
Google is all about speed, both under the hood as well as in the user experience. So, in order to make Reader act and feel more speedy and responsive, we've removed some visual clutter, simplified some features and given everything a bit more breathing room. Out with the old rounded corners, drop shadows and heavily saturated colors -- in with a softer palette, faster components and a fresh new look.