After the media outcry of Google Buzz's privacy issues, Google has set its goals on making the privacy parameters of Google+ simple to learn and as explicitly manageable as possible. No small feat.
The approach has been to make the process of organizing your friends, contacts, journalists, and "it's complicated" into your own Circles (whose names are never revealed to those inside them) the answer to all your social networking privacy qualms.
They've also been taking extra steps to interrupt you as you start to dive in to explain how the various pieces work with little pop-up tips and plain-English explanations as you start to share on the platform.
Overall, they've done a great job of simplifying the management side, so let me start out by saying that if you want to keep everything you share in Google+ between you and your close friends, that is perfectly possible... but there are handful of little "gotchas" to keep an eye out for as you start using the system. It's all within your control, but you need to understand where to look.
All Google profiles will be required to be public by July 31, 2011. Those who don't switch their profiles to be public by then will find their profiles deleted. New sign-ups for Google+ do not have the ability to opt for a private profile.
However, not everything in your profile is required to be public. Like Facebook, your name and the profile picture you upload will be public (though you are not required to upload a picture if you don't want to).
Unlike Facebook, you are also required to make your gender public (though "Other" is an accepted option). As Randall Munroe of XKCD has argued, many people have good reasons why they might not want to identify their gender publicly. To me, it seems like a boneheaded move that's not in keeping with the progressive spirit of the company. According to Google, this is to help people manage their online identities.
Every other part of your profile—from your links, to your shares, to your +1s—can be hidden if you so choose. Many parts can even be shared with some of your Circles, but not others. To help you understand exactly what you're sharing with the World, Google has added a handy little tool to view your profile as anyone else would see it. You can specify specific people, or even "Anyone on the web".
People coming from Facebook may expect that their friends, and maybe their friends of friends, will see the comments they leave on their friends' posts. As Google+ allows you to choose exactly who to share each post with when you post it, many people may not realize that the comments you leave on a post will be visible anywhere that post is visible. That means if you comment on a friend's public post, that comment will also be public, even if you've set everything else to only share with people in your circles.
Keeping this in mind, it's very easy to manage. You can always tell how public a post is before you comment as it shows up at the top of each post next to the time-stamp. For "Limited" posts, you can even click the word "Limited" to see the exact list of the people it's visible to.
In theory, Circles are the answer to your social networking privacy woes. In practice, it can become something of a mess. Google+ sets you up with 4 basic Circles for you to sort your contacts into: Friends, Family, Following and Acquaintances. From there, it can get a little confusing, when you start to take into account how you share your information. Do you want all your Circles to see your latest update? Or are you okay with Extended Circles (meaning everyone in your Circle and everyone in their Circles) viewing your information? What happens when people are in several Circles?
As a general rule of thumb, if you share something with a circle, everyone in there will be able to see it, even if they're in another circle that you haven't shared with. However, it won't show up in their primary stream if you're not in one of their circles. They'll have to visit your profile, or visit their "Incoming" stream in order to see it.
This flowchart, courtesy of Lee S., demonstrates how users can or cannot see the posts you make. As you can see towards the end, it can get a little complicated. If you're not careful, you might select the wrong Circles for your post. If you make a mistake, you can always delete anything you've shared.
There have been many strategies devised for dealing with Circle management, and we'll be getting deeper into those in the near future. In the meantime, just remember to keep an eye on the top of each share and you'll know exactly who it's visible to.
In the same way that I can copy & paste your Facebook posts and share them with my friends, by default people can re-share your posts in Google+ with the click of a button. They can't re-share publicly if the original post was not public, and they'll get a little disclaimer prompting for the use of personal discretion when they try to re-share something that wasn't public, but this approach can end up spreading your thoughts around if you don't disable it.
That said, it's very easy to disable re-sharing. To the right of every post is a circle with a down-arrow that will open a drop-down menu for managing the post. The menu lets you disable resharing, comments, or even delete specific comments.
So, when you've posted something that you want to keep between you and the specific circles or individuals you've shared with, just be sure to disable resharing.
Keeping these 4 things in mind, you can be as privately selective, or as public as you like with each individual post you make on Google+.
Above all, Google wants to get privacy right with Google+. The primary purpose of this field test is to seek out the issues they may have overlooked. They've already made a couple changes to the way privacy, resharing, and Circle management works based on feedback from those in the Limited Field Trial (it's only been open for 1 week!).
So, if any of these issues sound like deal breakers to you, be sure to let Google know (there's a handy little feedback button in the lower right of every page in Google+). They're going to continue to refine it until they get it "right" before they open the doors to the masses.