A switch on/off in the preferences is needed (because privacy choices must be easy for everyone) and I'd choose "off", but I think this bit from Google may ease the mind of someone here.
> It’s important to note that any time Safe Browsing sends data back to Google, such as information about a suspected phishing page or malicious file, the information is only used to flag malicious activity and is never used anywhere else at Google.
As a Firefox user, I really think it's poor form on the part of Mozilla to not provide any additional information or re-assurances on their website about the data captured and recorded by Google. Mozilla's slogan on their homepage is "Commited to your privacy and an open web". Being committed to privacy means being open and explicit about the data captured through their browser services, no matter how innocuous the data might seem. It also means presenting that information clearly and making it easy to find. People can then make informed choices about whether they want to use such services.
This is the sort of thing I would have expected them to have said:
"When you download a file from a web page, Firefox checks that the file does not contain a virus or malware before you save it. To check the file is safe to download, Firefox contacts Google to use a service they provide called Safe Browsing. Google checks if the file is harmful or safe, and sends this information back to Firefox (this normally happens in a few seconds). If the file is safe, Firefox will start the download. If the file is harmful, Firefox will block the download and display a warning message.
When Firefox uses the Safe Browsing feature, it needs to send Google information about your download. Google records the following information from Firefox: your IP address, the name of the file you are downloading, the address of the website, and [insert any other data recorded here]. [Also insert a re-assurance that Google does not keep a record of all your downloads against your Google account or against your IP address - assuming this is the case. Also explain how Google uses that info. and how long it's kept for etc.]
[Then finally explain how to switch off this feature if you don't want to use Google's Safe Browsing feature.]"
> It’s important to note that any time Safe Browsing sends data back to Google, such as information about a suspected phishing page or malicious file, the information is only used to flag malicious activity and is never used anywhere else at Google.