Word from Google IO is that Google Music will delete user MP3s, if the copyright holder has a legitimate claim against their music being on the server. And it will use the same backend tech to do so as YouTube.
For end users, this means that album/song leaks and pirated music will not be tolerated. And though it seems like it will be difficult to distinguish what's pirated and what's not, Google will probably use that same analysis tech they use for playlists to verify you have the right to upload that track to Google Music (spectral analysis could expose rips from different sources). And that means if you've happened to download a leak or any unauthorised rip from the internet, then uploaded it to Google Music, it could be taken down.
And not that Google is wrong for doing so, but that will kill the appeal of Google Music for some people out there. [Google IO]