The Electronic Frontier Foundation has posted an article requesting that users take care when activating the "Search Across Computers" option in Google Desktop (available only for the PC right now). Although the article certainly raises an interesting question, there are some specifics that might mitigate at least some of this:
According to the FAQ about the Search Across Computers feature, Google copies the files to its computers in preparation for indexing and they will sit on Google's servers until the other computers are available. It's not clear to me exactly what is copied up or down to the other computers (for example, this could be a really nice synchronization capability if it moves the entire file).
Also, the software pays attention to the Google Desktop preferences and thus doesn't index files in folders that you request. Since these aren't being indexed, they aren't uploaded.
Finally, the only content sent around (or indexed for that matter) are Microsoft Office documents (Word, Excel, PowerPoint), web history from your browser, PDF Files and Text Files in the My Documents folder of your PC.
This isn't to say that the EFF is blowing smoke, but just to say that there appear to be some safeguards in the system. However, with that said, Google doesn't take any pains to state exactly how long files will remain on their servers. In particular, they comment that storage on their computers "is necessary, for example, if one of your computers is turned off or otherwise offline when new or updated items are indexed on another of your machines. We store this data temporarily on Google Desktop servers and automatically delete older flies". However, they don't explicitly say it will be deleted once it is downloaded.
Hopefully, more disclosure will be forthcoming.