Google's motto is do no evil, and they haven't done anything too terrible but they know a lot about you.
Your IP doesn't change as often as you think. It stays the same for as long as you are connected by modem, and can stay the same for several weeks if you don't restart your router for your DSL or Cable.
Every time you Google search, Google has your IP and what you searched and which links you followed. Every time you visit a page with Google Ads on it Google knows your IP and what website you're looking at, when, and how often. If you log into one of Google's services they can link your IP address to those actions and add that information to your profile.
Not to mention if you use Google maps for directions they have additional information about where you may be planning on traveling.
A few other slightly evil things Google has done includes filtering searches and providing identifiable information to the Chinese government, but they're not the only company to do this (yahoo and microsoft too) and if they didn't they would not have access to the Chinese market.
And of course Google keeps introducing new services and are becoming deeply involved in most things you do online. Mapquest -> Googlemaps, Sourceforge -> Google Code, Skype -> Google Voice, Manage your medical records with Google Health, Google Android, GOOG-411, Google Scholar, Google Books, the Google OS. This isn't inherently evil, but it gets a little worrisome.
So the moral of the story, be aware how much personal information is out there, and act accordingly to maintain the level of privacy you want.