The Buzz shared items are the sum of Chat status messages, Google reader shared items and Picasa image shares:
Your Google Reader shared items, Picasa Web public albums, and Google Chat status messages will automatically appear as posts in Buzz. To edit your connected sites or change privacy settings, view connected sites."Connected sites" create posts in Buzz. Mine started out with Picasa public albums and Google Reader shared items. It's not, however, showing my Chat status messages as a "connected site" so there's something funny there. Those should really show as "connected sites". [I don't think Chat updates are doing anything at the moment].
I think that Buzz is the gathering point and Buzz posts don't go to Google Reader shared items or to Chat status, but really it's hard to tell. The site is semi-stable at the moment.
I've never had much use for Twitter, and it looks like I'll have even less use in the future - especially if Google ties this into SMS.