The Google Terms of Service say this:
5.3 You agree not to access (or attempt to access) any of the Services
by any means other than through the
interface that is provided by Google,
unless you have been specifically
allowed to do so in a separate
agreement with Google. You
specifically agree not to access (or
attempt to access) any of the Services
through any automated means (including
use of scripts or web crawlers) and
shall ensure that you comply with the
instructions set out in any robots.txt
file present on the Services.
Google has ways of making life unpleasant for you / your company if you violate the Terms of Service ...
UPDATE: The second sentence is about the way that you use Google's services ... including their published APIs. It is not entirely clear from the wording what is allowed and what is forbidden; literally speaking "any automated means" is very broad. However a Java app that performed Google searches, screen-scraped the results and repackaged them to provide some value added service would (IMO) be a violation of the TOS. And using Google's published APIs to do the same thing would (IMO) also be a violation.
But that's my opinion, not Google's. And it is the Google opinion that matters. If anyone is thinking of doing something like this, they should contact Google and check that what they are proposing is OK.
The point is that Google is not going to assist people to subvert their search business model. Anyone who thinks they can get away with it based on some clever interpretation of the TOS is going to get burned.