As a part of its search functionality, Google creates redirection links that send users to other sites on the Internet. Although the search engine giant has some simple measures in place that attempt to prevent tampering with these links, it's possible to create URLs that appear to go to www.google.com, but actually send a user to an arbitrary site on the Internet. Consider this example (link will probably no longer work):
That link starts with www.google.com, but (if you had clicked on it within the first few minutes after it was created) it would actually take you to
http://3mu.us/ts/google.html, which is a page I constructed to look exactly like the iGoogle login page. (Don't worry, it doesn't actually capture any information… but it could!)
Although Google would have a hard time preventing me from trying a phishing attack on their users, allowing me to use their own domain as the phishing URL helps increase the potency of my attack tremendously. Basically, they are letting me use their users' trust in the google.com domain against them.
Their mitigation strategy appears to be that they set a timeout on the link (which is why the above example probably won't work). Of course, the most common phishing attacks are propagated through email. Users who are sitting at their computers when they receive an email warning them of a "serious problem with their iGoogle account" might be enticed to log in immediately to check it out.
This vulnerability is obvious enough that I'm betting I'm not the first one to find and report it, but I notified Google just the same. I'll post an update when I have their response.