I just upgraded to the new Google Earth 5.0 beta and was really surprised when I first launched it to get this dialog.
The problem with this are the options. So, I get to either install Google Software Update, or Quit Google Earth. Where is the button saying "Decline" and allow me to just happily run my software and update it myself. Smells a lot like Microsoft. The last paragraph of the text is the worst (highlighting is my addition).
To continue using Google Earth, you must accept the new Google privacy policies and allow Google Software Update to run in the background on your computer.
I may have to remove Google Earth and bid this thing farewell. Google, you must accept that people have the right to choose what software they allow to run on their computer. It's my computer, not yours. Get back! I didn't read the new privacy policies, almost scared to look in there. What else does this Google Software Update do while running in the background?