Stupid question. Do they only keep a history of chats happening inside the Gmail chat client? I only ever use Google Talk via Adium or Pidgin. If they're recording my conversations even when I'm not in the Gmail app and I can't turn this off, then I think I'm done with my Google account.
How do you confirm other than looking for chat logs within Gmail? I don't have any chat logs as I had all conversation logging disabled before this update.
I am connected via Adium pretty much all the time, and talk to multiple people every day.
Gmail shows me one "chat", from years ago, which consisted of me and a friend trying out the chat-from-within-gmail interface. Nothing else is in there.