According to the Wall Street Journal, the Soon-to-Be-Inter-dimensional Empire also known as Google is planning to give free online disk storage beyond the gigabytes they already allocate for GMail, Picasa or Google Apps. This space will be able to hold any kind of file, although it's not clear how would it be integrated with your desktop, if at all. The storage service, which hasn't been officially confirmed yet, brings up loads of questions and concerns: Would it work like AOL's Xdrive or Apple iDisk, fully integrated with your computer? It looks like the more user-friendly option, so we can assume it will be. Would Google analyze the data stored in their servers for advertising purposes? They will be providing with search on your stored documents, so most probably they will be able to give you ads while you search results.
Does this raise privacy concerns? According to the WSJ, Kevin Bankston, staff attorney at the Electronic Frontier Foundation, thinks you will be less protected, although this is the same issues we face now with Google Apps, GMail and plenty of other online services, so no news there. Google says that "we have extensive safeguards in place currently to protect our user data and we have a very strong track record in this regard."
Like always, we will have to wait and see.