Just downloaded it.
Before downloading I was looking for one feature and one feature only. And I found it. It was just as I expected.
You have to
Now think of the data Google will have access to:
1) Pages you visited (everything below is a subset of this)
2) Pages that made you go to google and search
3) Pages you went after searching
4) Pages you go to while using google products
5) Pages you go to right after using google products
6) Which google competitor is doing well
7) Which isn't
the list goes on and on and on
This kind of rich data will make advertising a lot more relevant, but it gives a ton of power to Google.
It also makes product development all that much easier, they'll know what to build next by looking at what people are doing.
We live in the age of statistical sociology, that's for sure.
What I don't know is whether the Google toolbar did the same. If it didn't this is a big big product for Google.