According to Findlaw’s article, Google’s New PC Search Tool Poses Risks, using a shared computer on which Google Desktop has been installed could be a privacy risk.
People who use public or workplace computers for e-mail, instant messaging and Web searching have a new privacy risk to worry about: Google’s free new tool that indexes a PC’s contents for quickly locating data. If it’s installed on computers at libraries and Internet cafes, users could unwittingly allow people who follow them on the PCs, for example, to see sensitive information in e-mails they’ve exchanged. That could mean revealed passwords, conversations with doctors, or viewed Web pages detailing online purchases.
Source: Findlaw’s The Practice Paper