All I have heard so far about the Google Desktop Search, had something to do with security, or better yet, the lack of it. But it's nice to see you found use for it. I don't work on Windows machines enough to really look at it, but when as far as I know, there are nice substitutes that do not compromise your computer's security:

Most often, I use it to grep source code, like the Perl and PHP source.

I believe the Windows 'Find' (or whatever it is called) can 'grep' somewhat too, but if you need more control, there's of course always 'the real grep' in UnxUtils

Helpfully, it also keeps caches of older versions of my files.

Cache is not backup. A simple SVN, CVS, whatever revision control will do a better job -I think.

Last night I even had a dream about the desktop search...

Find some help, please ;)

(For those of you who don't know: Google Desktop can index files under all user accounts on your PC. This feature has caused some privacy concerns.)

I'm not sure how the Google stuff works exactly, but I find it hard to believe it takes over (hijacks) any account and uses that. You are saying you get access to files you usually do not have access to and you have a mere mortal user account (no 'root', 'administrator', 'whatever windows calls it')?