The problem with the Toolbar is that, if the app's advanced features are running, Google also keeps a record of every single site you visit
Just use the Google toolbar but not the Advanced features if you are concerned. And from Google's toolbar privacy statement:
Use of the Advanced Features of the Google Toolbar requires that information about the sites you visit be sent to Google. This is needed to make these features possible. With all advanced features disabled, no information about the sites you visit will be communicated to Google.
Google respects and protects the privacy of the individuals that use the Google Toolbar. To learn more about the privacy protections we have built into the system, please read our Toolbar privacy policy.
You can select which advanced features you wish to use below or on the Toolbar options page. To learn more about each of the advanced features, consult the Toolbar button help page.