Christian Langreiter has a good response to Raul Valdes-Perez (Vivisimo)'s essay Why Search Personalization Is A Dead End.
I enjoy the fact that Google, Last.fm and Amazon take note of usage data and present related information accordingly. What gets awkward is when you've built up a large amount of information and there's no way to clear it out and start again, to get information presented that's more related to your current interests. I've done this on both Audioscrobbler/Last.fm (though not for a while) and del.icio.us (after experimenting at the start): it's unpleasant to have the thought in the back of your mind that you shouldn't do certain things because they might end up skewing your profile and make the resulting recommendations less effective, especially when it comes to web searches (ie Google).
Update: you can actually delete Personalized Search from your Google account. I haven't tried it yet to see if the results come back if you add it again.