tsk puts forward some of my view too. IMO this hue and cry over Google is just to create paranoia. No one is forcing you to use Google or its services.
You might argue that your friends are using the service, so you are already in their database. I ask you, Why do you have friends that would do such a thing to you?
All websites love to have more info in their visitors. This enables them to target users specifically. MSN, Yahoo and ALL sites on the net do this. Google just happens to be an easier target.
Did you know that GoDaddy.com, the largest domain name seller uses a unique cryptographic key to encrypt private information like the address and phone number of a domain owner, but lets Government agencies in the US have the decoding key? They dont even have to ask GoDaddy to decrypt the info. (Before the Patriot Act, this needed a warrant, now I dont think so)
I think Sam's philosophy is better suited when you are on the net. Stop worrying, but dont do anything stupid like giving out CC numbers and other personal info. Give those out to only reputed sites.
One last thing. I know how everyone is complaining about Gmail and how it "reads" your email. Guess what? Every email site that proves you with spam protection does this. Does that bother you? If so then use your own server with PGP, and hope that the NSA wont bother to read your emails
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I really hate recieving emails from Yahoo and MSN users. They have to serve their bloody ads to me even if I dont use their service. @%#$$