[begin rant]
"I've always been of the opinion that if you've nothing to hide....... "
This is fundamentally wrong. Everyone should have a right to personal privacy. It's nobody else's business if I do have something to hide or not. The initial hypothesis cannot be that someone is probably doing something wrong; it has to be that they are doing something OK.
What's more, the definitions are constantly being changed by the ones controlling the system (i.e., the government).
I mean, by that length, if next week a ruling went out forcing everyone to be naked at all times, you've be OK with it? I mean, you've nothing to hide...
[end rant]
Regarding this Google thing: as the above say, it's techology that's been around for years, nothing new. As long as it's an opt-in (and not opt-out) service, then only those who want to use it will do, which is fine. Personally I don't like the idea, but I can imagine some pretty cool games resulting from this.