Here's Google's latest compromise: convenience for privacy.

Privacy fears hit Google search

(Excerpts:)

"We think this will be a very useful tool, but you will have to give up some of your privacy" Marissa Mayer, Google

Google is increasingly in the spotlight over the issue of privacy
A leading US digital rights campaign group has warned against using Google software which lets people organise and find information on their computers. The Electronic Frontier Foundation said the latest version of Google Desktop posed a risk to privacy.

This is because a feature in the software lets Google keep personal data on its servers for up to 30 days. Google says it plans to encrypt all data transferred from users' hard drives and restrict access.
...
"Unless you configure Google Desktop very carefully, and few people will, Google will have copies of your tax returns, love letters, business records, financial and medical files, and whatever other text-based documents the desktop software can index".

  
Full article:
http://news.bbc.co.uk/1/hi/technology/4700002.stm

This is BS...it's default is off...you don't have to configure it "very carefully".