Google seems to have plans to increase the list and scope of terms it censors from Google Instant.

Kent Walker, Google general counsel:
"We will prevent terms that are closely associated with piracy from appearing in Autocomplete. While it’s hard to know for sure when search terms are being used to find infringing content, we’ll do our best to prevent Autocomplete from displaying the terms most frequently used for that purpose."
[Google Public Policy Blog "Making Copyright Work Better" 2010-12-2]
http://googlepublicpolicy.blogspot.com/2010/12/making-copyright-work-better-online.html

An earlier Google blacklist of terms can be found at 2600.
http://www.2600.com/googleblacklist/

Mitch Bainwol (chairman and CEO of the RIAA) said:
"Obviously, the details of implementation will be critical, and we look forward to working with Google on all the steps necessary to effectively combat infringement."
[riaa.com Music Notes Blog "Better Musical Googling" 2010-12-2]
http://www.riaa.com/blog.php?content_selector=Better_Musical_Googling

Chloe Albanesius has a report at pcmag.com.
http://www.pcmag.com/article2/0,2817,2373766,00.asp

slashdot: http://search.slashdot.org/story/10/12/02/2058247/Google-To-Block-Piracy-Related-Terms-From-Autocomplete

Previous censoring in Google Instant:
http://blogoscoped.com/forum/174697.html
http://yro.slashdot.org/article.pl?sid=10/09/29/0526215

Some of the comments by Tyler (TDMurphy) on that Google Public Policy Blog suggest that Google is censoring the comments.