OpenID Connect [0] is "an interoperable authentication protocol based on the OAuth 2.0 family of specifications." Note this is a different protocol from OpenID 2.0.
Yes, OpenID Connect is a protocol that builds on the authentication features developed from previous versions of OpenID, and merges it with the authorization features defined via OAuth.
It is all laid out fairly clearly in this comment on the original blog post, for example: http://developer.telerik.com/featured/oauth-has-ruined-every...