Some extended excerpts:
We have two main ways of personalizing your Google experience. First, you can customize products and services like the Google Personalized Homepage. Personalizing your homepage gives you the at-a-glance information that you care about -- such as your latest Gmail messages, news headlines, or to-do list -- right at your fingertips, just the way you want it.The change, as described on this Google help page, is that anyone who signs up for a Google Account will be given a search history, a personalized home page, and individually personalized search results based on their past behavior.
Second, we offer automatic personalization through things like personalized search and recommendations. Our goal with these types of technologies is to make your Google search experience better based on what we know about your preferences, without you having to do any extra work.
Today, we're taking another step toward making personalization more available to you by combining these two into a single signed-in experience. Now, when you're signed in, you'll have access to a personalized Google -- one that combines personalized search results and a personalized homepage.
Keep in mind that personalization is subtle -- at first you may not notice any difference. But over time, as the search engine learns your preferences, you'll see it. For example, as an avid Miami Dolphins fan (no joke), searching for [dolphins] gives me info about my favorite football team, while a marine biologist colleague gets more information about her salt-water friends.
Before, everyone had to explicitly enable search history and personalized search to get those features, so very few did. This change of the default will mean that many more people, anyone who has used a feature that requires a Google account, will see personalized web search results and the other personalization features when they go to Google.
See also Danny Sullivan's detailed review of the Google personalization features and his thoughts on the impact of making them more easily and widely available.
See also Eric Schmidt and Larry Page's comments on personalization from their recent Q4 conference call.
See also some of my previous posts (    ) on Google's personalization.
See also my earlier post, "Potential of web search personalization".