I just picked up a Motorola Xoom and noticed something odd when checking it out. I turned on the Wi-Fi for the first time after syncing with my Gmail account, that my home network (which I was not in range of) showed up. I also noticed that the Xoom connected to my local network at work. I found it odd because it was obtaining an IP address before I told the Xoom what to connect with and more importantly what the password was. I own an Android device (Droid X) and these networks it had as "remembered" were all the AP's I had connected to with my phone previously. I have allowed Android to sync my contacts and some application info.
The obvious implication is that Google was storing the names of the AP's that I had previously joined and more importantly the passwords that I had entered and saved on my Android phone. I have not read any information reporting this previously nor can I find similar stories when I do a quick Google search. Most importantly I don't remember authorizing storing of this data but who knows what fine print I overlooked in various EULA's. I don't know if this is specific to Android Honeycomb 3.0 or Xoom but this is the first time I have noticed such activity. I guess more testing needs to be done by others for verification. Let me know in the comments if you have seen this behavior before or can test on the Xoom or other devices.
Another observation I have made is that all the applications from my phone restored on the Xoom rather than just the paid applications. This is an upgraded Honeycomb 3.0 sync functionality because Android 2.2 only let one restore paid applications from the Android Market. This may mean that storing the AP names and passwords was part of this upgraded capability in Honeycomb. I then noticed that under settings and the privacy tab that they have added "Backup my application data, Wi-Fi passwords, and other settings to Google servers. The Droid X Android phone that I have under the same tab has "Back up my settings and other application data. This definitely confirms that Google is now backing up Wi-Fi names and passwords so uncheck this if you don't want Google to have this info. The problem I have is clearly they stored that information before from my phone without advertising this until it restored this data on my Xoom. Now I wish they broke out the options so I choose yes for contacts and no for passwords. Bad Google, ...again!