I have read articles about all this and have read the Policy itself very carefully. The CNIL is yet, as far as I can tell, to elaborate further on its criticisms. From my knowledge-base (which is not as a lawyer!), apart from the fact that it is written in “legalese”, the policy seems quite clear on what Google will do with your information which you hand over of your own free will! I can also imagine that the transfer of your personal data between the different companies globally is an issue if the appropriate authorisations from relevant countries and the EU Commission have not been sought (Principle 8).
Please note that this is only my opinion based on what is currently available and my knowledge of the UK Data Protection Act 1998 (based on the EU Directive). I have to say I have read many Privacy Policies that are a lot less clear than the Google version and a lot less compliant! I shall watch this story unfold with interest.