There's a rumor that Google's Toolbar is spyware.
The Google Toolbar does report back on every site you visit, if you have its advanced features enabled. However, as repulsive as this is to me, I don't consider it "spyware" proper, simply because they are quite up-front about it, to the point that they explain the behavior upon installation, and even when you subsequently attempt to enable an option that causes the phone-home behavior to take place. It's not "spying" if the user knows about it. (My comments apply to version 2.0 of the product; previous or subsequent versions may behave differently, I don't know.)
As for using Google Toolbar or Google Deskbar, I don't. I have "quick search" items defined in Windows*, and in MyIE2. To do a Google search in MyIE2, all I have to do is enter the search text and hit Enter. It's the same in Insecure Explorer, except that I precede the search text with a "g ". When I need things to be easier than that, I will know it's time for some introspection.
I even block Google's cookies, but still force the site to apply my preferences. This is easily accomplished by applying the preference toggles shown in Google search result URLs to the "quick search" definitions. For example, my Google quick search string is "
http://www.google.com/search?q=%s&num=100&hl=en&ie=ISO-8859-1&safe=off&sa=N&tab=wg", which enables highlighting (&hl=en), causes search results to be 100 per page (&num=100), and so on. All without using evil cookies that track searches against IP addresses.
To figure out which preference parameters to use for quick search definitions, enable cookies for Google,
set your preferences on the Google site, do a search, then examine the URL in the address bar. It will look something like the one I showed above. Replace the search text in the URL with "%s" (without quotes), save that URL as a quick search in Tweak UI, then delete and deny Google cookies.
* Quick search definitions can be created and edited on Windows XP using
Microsoft's free Tweak UI utility.