If you’ve been wondering about the security and privacy of Google Apps, this security whitepaper may answer many of your questions: http://www.google.com/a/help/intl/en/admins/pdf/ds_gsa_apps_whitepaper_0207.pdf
Additionally, I just came across an interesting announcement from the Google Apps team. It appears that Google Apps for Government version has just received Federal Information Security Management Act (FISMA) certification and accreditation from the U.S. General Services Administration. You can read the official post here: http://googleblog.blogspot.com/2010/07/introducing-google-apps-for-government.html
-Chris