From their terms and conditions:
Consent to Collect Non-Personal Information
Google Desktop Search may collect certain non-personally identifiable information that resides on your computer, including, without limitation, the number of searches you do and the time it takes to see your results. Unless you choose to opt out, either during installation or at any time after installation, non-personal information collected will be sent to Google. This information will be used by Google only for purposes of operating and improving future versions of Google Desktop Search and will not be disclosed to any third party or used for any purpose other than as described in this agreement. To learn more, please read the Privacy Policy located at desktop.google.com/privacypolicy.html.
