If gravity would suddenly fail, I guess the earth would just continue in a straight line out into space

If there wasnt gravity, Earth would stop orbiting the sun and drift away in whatever direction is was travelling at the time, all the top la<x>yers of the earth, including the atmosphere, soil, animal life, and everything down to the crust, would drift away from the earth. The moon would drift away also.<br />
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Furthermore, the pressure at the centre of the earth is immense, so if there was no longer any gravity to hold the earth together, and maintain that pressure, the pressure at the centre may be too much for the crust to hold in, and the earth would explode. Not in the classic sense, but it would burst like a balloon, and fly apart in all directions. Think of a spring under compression, and you suddenly let go, it would expand. Same would happen to the earth. It's core would expand in every direction, probably ripping the earth apart.<br />
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For that matter, the same would happen with the sun. So to sum up, if gravity suddenly stopped, every moon would drift away from their planets, every rock planet would burst like a cheap party balloon, every gas giant would expand at an incredible rate until it dissipates entirely, the asteroid belt and every planetary ring would scatter, but none of this would matter because in the absence of any gravity to hold it together, our sun would go nova.<br />
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@ Extra55:<br />
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Erm, a star is a constant balance between its gravity trying to crush it, and the explosive forces within it trying to rip it apart. A black hole is created when a massive star's gravitational pull beats those explosive forces, this usually happens when the star "runs out of fuel" and begins to cool, meaning the extreme gravity of the star wins, crushing it into something small enough to fit in your garage, the unbelievable density of the new ob<x>ject causes gravity so strong that everything gets sucked in, and time itself begins to warp: Hence a black hole.<br />
If gravity were to be suspended, the star, instead of being crushed, would go nova, since there is no gravity to stop the star's explosive forces from tearing it apart.<br />
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So, i doubt that the sudden absence of gravity would cause the earth to turn into a black hole, something that requires the extreme gravity of a massive star, much bigger than ours, to happen.

The Earth would continue to expand out as all matter does until it is caught by the gravity of some other entity.

Gravity is very much everywhere, you mention "gravity holds earth" but to what reference? Do you mean it trajectory in space, the fact that it stays in one piece?...<br />
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Regarding trajectory, if gravity stops, it will move following a tangent to the ellipse it is currently following. (imagine you have a string with a small ob<x>ject attached and that you spin in circular motion with your hand, and suddenly the string breaks, similar thing)<br />
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The hearth itself would not old together, especially with the centrifuge forces (due to the hearth spinning on itself). It would disintegrate.

It is the sun's gravity which controls earth's orbit in the solar system. Our own gravity is what holds the moon in it's orbit, so it depends, if you mean what would happen if earth suddenly had no gravity (impossible, without it suddenly having no mass, but let's assume it isn't,) then first of all, the moon would stop orbiting us, and continue in it's direction of travel, at it's present velocity, off into the distance, until it either became captured in the gravity well of the sun or another planet. The chances of it achieving a stable orbit elsewhere would be minute, it's most likely it would "fall" into our or another sun. (if you understand the effect of mass on space, I don't need to explain why, if you don't, it'd take too long, just take my word for it.) As for the earth itself, as someone else mentioned, vulcanism would blow the planet apart, and we'd become a debris field orbiting the sun.<br />
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If the sun's gravity was suddenly, impossibly, magically removed or somehow negated, then yes, the earth would do as the moon would, and it would no longer orbit the sun, but travel off parallel to it's orbital path, away from our somehow magically massless, weightless sun. As long as we kept our gravity, we would maintain planetary cohesion until we fell into another star.

It would implode upon itself if gravity were suddenly suspended-eventually creating (in the earths case) a small "black-hole". <br />
-----I think.

Actually the opposite would happen. Black-hole that you refer to are actually extremely dense, so dense that there gravity attracts light, hence their black color.

If there were no gravity this EARTH, UNIVERSE & US were not in existence.<br />
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And you was not asking this question.