And to be honest im fine with google having my data they have a solid record for keeping things in line.
That simplifies things in a very reductive way.
The difference is Google gives you all sorts of services to export those insights and use them for your own benefit. Most of the google tracking data is exported (with the big exception being the backing to Google Now for card selection). But most people don't realize how much data you can farm from the Latitude API.
The problem we face is that a lot of the features we want delivered from our products are really only achievable if we offer up our data for analysis to some big external compute farm. We aren't at the point yet where your mobile devices can do it in house. So we have things we want, but the only way to get those things is to take a privacy risk.
But this is hardly a new situation. Why do you trust your banks not to do this? Credit card providers? Stores? Loan and insurance issuers? Cellphone vendors? I'm asking why you are not creeped out or outraged all the time because a trivial search of the landscape reveals all these institutions are doing such things but not providing any value back to you for it.
b) why would a company as big as Google care about what a single user does?
Nice try, Google secret agent :P
No, seriously, Google is interested in what you browse and already tracks it (anonymously, I hope) to target ads.
So it all leads to your first point. There's really no difference in practice. But in potential it's true that a device with a cellular network connection can provide more interesting location infos than a desktop tied to your desk.