I picked this thread up after having exactly the same concerns an the original poster, dgray, and found this thread via a Google search. I find it a shame that this thread is in a phone-specific area, and not one of the more general areas on this forum, where it would reach a wider audience.
I am a recent owner of an Android phone and I have an additional concern that has only been touched on. That of the contacts, and their synchronisation with my Google account.
It has been stated above by a number of people that you make your own decision as to whether to allow Google to have your personal data, and to some extent this is true, and I am not concerned if they know what web pages I have accessed, or other more trivial personal data.
However, if you consider contact information, this becomes a different matter, and you need to consider whether your contact data is really yours to make this decision with? Most contact information will have names, addresses, phone numbers and possibly dates of birth, for birthday reminders.
When I first got the phone, and connected up to the service with my Google account, I did not properly stop to consider that Google will (and now have) all this contact information.
I have not asked any of my friends and colleagues whether they mind Google having their name and address stored online, and at no point was this even suggested as a potential requirement.
On all my previous phones, I have has this information within the phone, but have not been forced to synchronise this information online.
I came to realise how much information was now with Google when I was trying to make the phone remind me when one of my contacts birthdays was due, and found that I had to modify settings in my Google account online to achieve this, rather than some settings on the phone, as I had expected.
I do not feel comfortable with this current situation, but I also wish to have a properly functioning phone, and from my current understandings, it would appear that unless I synchronise my contacts with Google, then I cannot have my phone remind me when one of my contacts birthdays is due.
I feel this is quite unacceptable.
Cheers,
Steve