The New York Times has a lengthy article detailing the settlement and background of a lawsuit by 38 states' attorneys general against Google for privacy violations in connection with its Streetview recording of homes and streets. It was not the actual images of houses that got Google into trouble. The little Google cars and vans were doing more than just recording images of the roads and environs as they drove across the country building maps for Streetview. They "data-scooped" from millions of unsecured wireless networks as they passed by! Apparently, the idea was hatched by a single Google engineer, but he told others, and the news eventually reached the top of Google's hierarchy, who did nothing to stop it. When the government began an investigation of the matter, it appears that Google tried to cover up the matter. (see the Wall Street Journal article closer to the scandal.)
The settlement is $7 million which is a pittance to Google, which evidently takes in $32 million per day (see the New York Times article, which notes this figure). Google has had a long history of problems understanding respect for privacy as well. See Scott Cleland's excellent blog post at Precursor blog about this. He not only includes a lengthy list of Google's history of privacy incursions, but also links or articles that include the 2010 and current Google statements on privacy, and the statement from the Connecticut Attorney General which announces the settlement. This page includes two links which explain how to set up your wireless router for encryption to secure your network for privacy:
Don't be evil, Google! The image of a Google Streetview car with the equipment is courtesy of the Wikipedia Commons. It is labeled Google Street View car in Southampton, Hampshire, England.