I tend to agree with you, I don't like the idea of all this information about me being so easily accessible. I know the information doesn't really leave my computer, but it still sorta freaks me out. Also, the fact that I don't live alone means that someone could find out much more easily what I am doing on my computer (something I'd like to avoid).
In the past the google bar hasn't worked with Mozilla Thunderbird, which is my email client along with gmail (die outlook). I'm not sure if it works with Firefox either though I'd assume that it does. Really I get along just fine without the google bar. I don't think I really need it. If it came from just about any other company people would probobly jump on it for being spyware (but thats another issue).
I am getting somewhat tired of all this speculation about what Google is going to do next. I've heard them all: Google Browser, Google IM, Google OS, etc. Google is fundementally a search and advertising company. Why would they try to enter those markets. They are already completly saturated. They would be extremly unlikely to succeed in any of them. People forget Google is a business, and it's goal is to make money.