From the Google Reader blog:
As Google Reader is all about reading, we thought we should give our users a chance to maximize their screen space whenever possible... thus fullscreen mode was born. You can toggle the fullscreen mode through the 'f' key. Additionally, you can use 'shift + u' to show and hide the navigation panel so you can easily change what you're reading without leaving fullscreen mode.
Eagle-eyed viewers might have also noticed we've added a new category to the trends page: clicked trends - now you can see which sources you click on the most.
And finally, something many of you have asked for before...we now show you your lifetime read item count. That's right. Every. Single.* Item.**
It's not technically full screen (my browser takes up screen real estate too), but it's still pretty useful. I'm going to start using to read comic strips and view large images without having to leave Google Reader.
Here's how you enter and exit the new mode: press the letter f on your keyboard (not ctrl+f, shift+f, etc). Just press f.