Google Analytics - Every time you visit a page with this javascript, google obviously receives a get request from your IP address
+1 Button - Similar to what facebook is doing, hits for the +1 button, whether you click it or not, are another GET request to google
Your google account - if logged in, they obviously have a ton of information about you.
If I recall correctly, he said that the idea of tying these together came up frequently, but has always been shot down as too invasive. At the time, he said he believed they had no plans to ever do this when he left the company. Doing this would be easy, and would tie nearly all of your browsing activity to your google account. That, to me, is evil.
This update sounds suspiciously like they have gone ahead with this idea. If so, I don't understand how people are ok with this.