Chris Sherman has the details on Google Desktop Getting New Features;
You can use the Google Desktop to search across multiple computers. This means that you can use your laptop to search for content on your desktop or any other computer that you choose. This is an advanced feature that you must enable to use, but setting it up is a straightforward process.
Technically, how does it work? Life Hacker reports;
* Computer A (say, a home PC) and computer B (the one at work) both download Google Desktop, which indexes all files on the hard drives and sends text copies of Office documents (Word, Excel) and other files to Google.
* Computer B signs into Google, searches for a file on Computer A and retrieves it. Google says it only keeps the data for 30 days and will delete the files if not accessed.
So Google is storing that data on their servers at some point.
Of course a topic like this will create some forum buzz. At our forums we have Donna who started a thread named Share your desktop search with other PCs? Not me! where she links to an AP story that says the files are stored for 30 days! No one in that thread thinks that is reasonable. The WebmasterWorld & DigitalPoint folks are joking about the privacy issues as well.