The demos of demographic profiling of search on adlab site of adcenter search technology. The image to the left demonstrates the end result; you get gender approximations based on search term. These are estimated from the behavior of the user I am guessing from total search patterns.
So, hypothetically if a searcher is obsessed with someone perhaps this indicates a male behavior. That profile data is tied back to search terms and presented to the marketing team as such. Interesting.
All kidding aside, I do see real value in demographic data when formulating strategy for clients. This does matter. Note that Google only released google trends after it was obvious that technorati and blogpulse visual reporting was skyrocketing in use. Perhaps this will lead to a similar disclosure from adwords or overture in the future?
Privacy? That is another matter.