I don't use google dns, so i'm not concerned, using dns servers located much closer to me. But even if i were paranoid about google knowing what i browse ... then i wouldn't be using any product google has put out. Even google search, as that records my search, and gives me ads, related to my current and previous search. Heck, i probably wouldn't be using the world wide web.
So let's put the question the other way round. Why aren't you concerned ?
You have to look at it from another perspective, also. Google is well known for caching information, and using it to build up their revenue, but in return they provide a whole bunch of "free" products like, gmail, google apps, youtube, gdocs, chrome, etc. Business has to work somehow.
The bad thing in all of this is, that there is no real competitor.
And don't get me wrong here, the web should be a little more private, and I agree with your concern on some levels. We are all different, and i'm happy we are.
OT: I would also like to know the answer to the op's question. I'm currently using MCR Froyo alpha4, and i'm kind of intrigued to try out JapJelly. Maybe i'll do a nandroid backup and take it for a spin.
Edited by buneech, 10 January 2011 - 10:25 PM.