The Google security breach that has received the most attention from commentators I've seen isn't really that Google can pry stuff out of your computer.
When you compose a document (or other data-containing file) the Google desktop search utility makes an index of it as you are "entering it." If you move the file, it tries to track where you moved it, so the index can be redirected. If you use passwords or encryption for security, it doesn't do a whole lot of good, because the index usually is made before you save and apply the password and/or other restrictions, and the index contains a "snapshot" of the info in the file.
The result of all this is that a file that you encrypt, or save with some other method to restrict access, can't be opened and viewed by unauthorized persons; but if they search on your machine for something in the file, the snapshot - often containing nearly the whole content - shows up as the search result.
Google was promising to do "something" about this one, but I don't know if there actually was a fix released for it. There may also be additional security holes I haven't heard about; but lack of interest has kept me from following this particular utility. With only about 800,000 files on my main hard drive, I just put stuff where I want it and nothing ever gets misplaced.....
(And the bridge is only $1.98, but you'll have to take a 99 year lease on the lakefront property in Yuma, AZ...)