Nicely indexed = the future.
(Note: I'm not saying that Zeitgeist will do that, just that it's desirable).
2 - The EU requires all ISPs to log *every single* connection for a period of 6 - 24 months (at the goverments' discretion). Google has managed to put its 'google analystics' tracker into half the web. Even with private browsing (no tracker cookies) it can log both your short- and long-term browsing habits, even if you don't use google search, youtube or gmail.
A lot of data? Yes. Unrealistic? No.
What's worse, this data tells more than enough about your personality and it's already logged (no need to even touch the 'social networking' craze of late.)
Paranoia? Yes! Warranted? Probably. (This is an open source community we are talking about, anyway, we all care about privacy).
My point is that a desktop indexing/tracking tool is hardly an invasion of privacy. It's there for your *own* use. Its data is not stored on some third-party server (I fucking hope!) - it's on your disk to use or delete as you like.
3 - sorry, but if you are rooted you are fucked no matter what. It doesn't matter if your data is indexed or not - it's there in plain view (including your passwords and everything else you'd wish to hide). Hell, the attacker could run an indexer on the spot if he wished.
Frankly, there's only one way to protect your privacy 100%: pull an RMS and disconnect from the internet. Afterwards, get rid of your credit cards, bank accounts, car, house, fake a death and go live on some rock. :P
A tool like Zeitgeist... simply doesn't matter to your privacy. It's like optimizing a bubblesort with SSE - pointless.