Reactions around the 'Net range from neutral/positive to highly alarmed. Ultimately, if you have personal accounts with Google (Gmail, YouTube, Google Apps/Docs, Picassa, Blogger, etc.), you should educate yourself about this.
I believe Google is within their rights to do what they are doing; they do after all, provide dozens of high quality products, most of which are free to users like you and me, and make their money off of ads. Being able to target ads more accurately adds to their bottom line. But, as responsible digital citizens, we are also within our rights to educate ourselves and protect our privacy as much as we feel is necessary.
Privacy in the world of the Internet is an illusion anyway, but if you are like me and you like to try and limit how much the big companies know about you while still taking advantage of their services, you might want to investigate how you can limit Google's ability to "cross-reference" your activity in each of their services.
The main steps you can take to prevent the cross-referencing, if you wish, are to delete and put on hold your Google Search History and your YouTube search history. I've included two links below from the Electronic Frontier Foundation which have really specific instructions with screen shots. It's best to take these steps today, before March 1st rolls around, if you can. But if you are reading this on March 1st or after, you can still make the changes applicable going forward.
For further information, Vicki Davis, AKA Cool Cat Teacher, explains quite well, I think, why even average folks who have nothing to hide might want to be concerned about this change from Google.
Hope this is helpful to you!
And yes, I do realize the irony of sharing this information with you via a Google product! :-)