I have personal proof that your search history, when logged in to Google, is applied to other Google properties.
I’ve been using Google Reader as my RSS aggregator. The blogs I have subscribed in Reader fall into three categories: Search/Marketing, Bicycling, and maybe one or two blogs belonging to friends that are a mix of both SEO and personal stuff. I also subscribe to updates on my friends’ Flickr feeds.
Nothing about parenting in there. However, I had been doing a lot (LOT) of searching around infant feeding recently due to the need to feed an infant, and figuring stuff out as a new parent. Note that NONE of my Google Reader feeds had anything to do with these topics.
So, today, in my ‘Top Recommendations’ box, what’s suggested to me? Two SEO-focused blogs and a blog about… breastfeeding:

(image is clickable for detail. You can see the sort of stuff I have subscribed in Google Reader, too, if you’re that kind of voyeur!)
Nothing in my RSS history suggests I care about breastfeeding. My search history is another thing altogether. I can only conclude that the suggestions are feeding from my logged-in search history, and not just which feeds I have live in Reader. There is no other logical explanation.
I really don’t know that I like this. There’s all sorts of stuff I search on that I might not want to read about every day. Like… breastfeeding.
Nice find. Google is just getting too smart, or should that read too nosey?
I vote nosey, DT.