The Electronic Frontier Foundation:

The EFF is asking users not to use the new version of Google Desktop that has a ‘search across computers’ option. The option will store copies of documents on you hard drive on Google servers, where the goverment or anyone who wants to may subpoena (i.e. no search warrents) the information. Google says it is not yet scanning the files for advertising, but it hasn’t ruled out the possibility.”

slashdot discussion. John Paczkowski has more.