Jacques Mattheij wrote a blog post named Google Web/Search History Disable Does Absolutely Nothing. Basically claiming that when you hit that delete button, Google just hides it from your Google Web History page but does nothing more.
Of course, this upset Google’s Matt Cutts, who said he was wrong.
Matt posted on Hacker News:
He then explains why Google does keep the search results for 18 months, for spam reasons. Matt said, “an easy example of preventing spam would be to detect and stop people trying to spam Google Suggest, which is based on queries that users do.”
I am sure many of you will enjoy that last quote, because clearly there is a lot of Google Suggest spam attempts that Google watches over.
Either way, technically, there are likely ways to associate your searches back to you even if you delete them. Like in the AOL example from 2006. But Google does do things to disassociate the queries to your Google account.
Forum discussion at Hacker News.