People like Google and their free tools. But as with many freebies, there's a catch, and this particular catch is a gigantic security risk.
A new feature in Google Desktop lets you "search across computers," which means you can index your files once and then search for them from another computer.
That's just about all the justification needed by anybody who is serious about security to ban Google Desktop in a business environment. This also goes to show that you simply must read license agreements and privacy policies carefully before using anybody's software.
On a related note, if you need a really good desktop search engine then try dtSearch, which can index text, HTML, XML, Word and PDF documents, Outlook mailboxes, and a whole lot more. It's a very powerful tool.