The Electronic Frontier Foundation is warning users not to install Google’s new version 3 of its Desktop search function. The application, which will store the contents of a hard drive on Google’s computers, making it available to other computers specified by the content owner.

EFF urges consumers not to use this feature, because it will make their personal data more vulnerable to subpoenas from the government and possibly private litigants, while providing a convenient one-stop-shop for hackers who’ve obtained a user’s Google password.

EFF Staff Attorney Kevin Bankston said: “Coming on the heels of serious consumer concern about government snooping into Google’s search logs, it’s shocking that Google expects its users to now trust it with the contents of their personal computers. Unless you configure Google Desktop very carefully, and few people will, Google will have copies of your tax returns, love letters, business records, financial and medical files, and whatever other text-based documents the Desktop software can index. The government could then demand these personal files with only a subpoena rather than the search warrant it would need to seize the same things from your home or business, and in many cases you wouldn’t even be notified in time to challenge it. Other litigants — your spouse, your business partners or rivals, whoever — could also try to cut out the middleman (you) and subpoena Google for your files.”

Google does seem to be chancing its arm on the privacy issue. Creating a virtual operating system on the Web is a great idea in theory, but more thought needs to be put into security of data and copyright issues.