I was going to write a lengthy post on how I think that we give Google too much information, and that we trust them far too much. They are, after all, a for-profit enterprise. They have motivations just like any other enterprise, despite their alleged "do no evil" mantra. Add in the flawed perspective of their chief exec with his statement that "If you have something that you don't want anyone to know, maybe you shouldn't be doing it in the first place." (see here for more on that)
However, rather than waste a lot of bandwidth, allow me to just point you a recent Rich Mogull post that pretty much sums things up.
Securosis: Google, Privacy, and You
I've been saying it for a while now... IBM was the "bad guy" until Microsoft displaced them... Microsoft has been the "bad guy" for quite a while now, but they're quickly being displaced as well... Google is the new boogie man, and for very good reason. They have too much information, too much control, and they've asked us to have too much faith in their willingness to put "good intentions" over "profit." As with any enterprise, we should always look at the profit motive behind key decisions - whether it be turning HTTPS on by default for GMail, or threatening to withdraw completely from China.
Just sayin', fwiw.