The latest beta of the upcoming Firefox 3 comes with a new feature known as "Malware Protection". The feature warns users when they arrive at sites that are known to install malwares like virus, trojans, spyware or other malicious code. This feature is supposed to be part of the final release of Firefox to be released in the next few months.
Firefox is able to tell you that the page is malicious by looking at a database provided by Google similar to the current implementation of phishing filter in Firefox 2. Google maintains a list of sites that are known to have installed malware. Whenever you visit a website, the address is checked if its par of the list which Google updates regularly. If it matches with a malicious site on that list, Firefox displays a warning and you can be taken back to your homepage.
I guess with the feature on, Google does know what sites you are visiting regularly and which sites you like... Google does not know any info on which sites you are visiting and by default Firefox downloads a list from Google and crosschecks!! May be they can show relevant ads to you based on this data... But you know, I'm just speculating... And does it even matter if Google knows that info?? THEY DON'T DO EVIL!!