No matter how you feel, it's a good reminder to do inventory on what you've unintentionally handed over to Google.
Take a personal inventory
First, think about the Google services you use (and have used in the past) and what kind of information you might have left behind.
Some Google properties you may use include Google (search), Gmail, YouTube, Chrome, Blogger, Picasa, Google Plus, Google Voice, Analytics, Docs, Maps, Music, Groups, Books, Wallet, Reader, Latitude, Feedburner and more.
Next, consider what kind of information that you would like to control.
For instance, your area of concern might be your search history or the videos you've watched on YouTube. Maybe it's your location, people you know and communicate with, sexual orientation, interests, age, religion, real name, or health issues (or anything in your history that may reveal this information to Google).
If other users already have your email, or other information that identifies you, we [Google Inc..] may show them your publicly visible Google Profile information, such as your name and photo.
Until now, your information on all these different services was mostly separate from other Google services you use.
Now it will be put all together, and Google has the right to use it internally and to create a profile with which to show you advertising targeted toward your interests, age group, location, and more.
Do note that Google's new policy has some interesting language around logs, specifically:
telephony log information like your phone number, calling-party number, forwarding numbers, time and date of calls, duration of calls, SMS routing information and types of calls.
This would appear to apply to Google Voice, so users of this service will want to take this tidbit into consideration. To me, the vagueness in this section is going to be particularly unsettling for many people who are left to guess exactly what it means.
Specific cleanup: your web search, YouTube history and more
If you don't know where to start, the google.com/dashboard is where you'll see the services collecting data that Google has about you.
Keep in mind that disabling Viewing and Search History in your YouTube account, and disabling Web History in your Google account will not prevent Google from gathering and storing this information and using it for internal purposes.
FYI: If you have Web History enabled, Google will keep these records indefinitely.
For an extra bit of insurance to prevent Google using your data to sell you ads, visit Google's Ad Preferences page and opt out. On the right side under 'Ads on Search and Gmail' you'll see where to click Opt Out.
Don't panic. It may seem overwhelming, but Google has made quite a bit of this cleanup easy to do.
What concerns me is what could happen to our personal info in an era when data is money, and that now our own individual data carries an unknown price (both literally and figuratively).