Google's motto is "Do no evil". TechCrunch says Google is at a tipping point. The controversy is around Google promoting its own services in search result pages. The argument is that the way Google promotes its services may confuse users that they are actually clicking on a valid, relevant search result, when it is really a "tip" from Google linking to its own services.
The hypocrisy is that Google has criticized Microsoft many times for doing similar things, most recently with the release of Internet Explorer 7.0. Even in this case Google showed its hypocrisy, slamming Microsoft about Internet Explorer, while making Google search the default in Firefox, Opera, and Safari. For more details on this see "Google supports choice...except on Firefox and Opera". Google is rumored to be developing a browser. If they do, will Google be the default search vendor? Of course!
Is this evil? No, I don't think so...just hypocritical. Google has every right to promote their own products and services. It is just good business to do so. But, maybe they should avoid the hypocrisy and stop criticizing competitors for doing the same thing.
Just to be clear, in the case of IE 7, when a user installs IE7 it honors whatever browser preference choices the user has previously made. If the user has chosen Google as their search service, IE7 installs Google as the default service. If no previous choice has been made then IE installs Microsoft Live Search.
We all try to do the right thing for our customers. Customers always choose the best products and services...despite how the PR machine would like to spin the story.