Behavioural targeting online is certainly nothing new, but it is the scale of the google ad network that makes this so significant, particularly in light of recent controversies relating the the google map street view.
It works like this...
Google sets a cookie to identify you and uses that to record your interests. Unrelated sites (on their ad network) will then serve adverts targeted to your recent interests.
Ok there's an argument for showing content relevance to the consumer, but is advertising really 'content'?
The other concerns is that you need to actively opt-out, although it's not quite as clear as it should be and you need to do it on ALL browsers and computers.
Whatever your thoughts, it seems to be enough of a concern for the information commisioner to get involved and I'm sure this won't be the last time we hear about this!