Does Google share information about its users with advertisers in any way?

I know Google's privacy policies say they don't, but Google collects a lot of (personal) information. Does Google use it (or will it use it) to better target ads?

Google says "We may share with third parties certain pieces of aggregated, non-personal information, such as the number of users who searched for a particular term, for example, or how many users clicked on a particular advertisement. Such information does not identify you individually."

They also say "We provide [personal information] to our subsidiaries, affiliated companies or other trusted businesses or persons for the purpose of processing personal information on our behalf. We require that these parties agree to process such information based on our instructions and in compliance with this Policy and any other appropriate confidentiality and security measures."
http://www.google.com/privacypolicy.html

What I always found interesting is that these policies aren't legally & methodically enforced in most IT companies. It's like there's only coincidental overlap between a privacy policy and what really happens. I have a feeling that Google engineers, because they're true geeks, follow these words more closely than companies like, say, AOL, who already once opposed their own privacy policy big time (by sharing user search queries with the world).