1) by using the service you grant Google use of the uploaded images. (e.g. they can use your image to increase their corpus, improve the service or use it for advertising, or use it to extract street numbers for their maps, or its always private and never stored)
2) What the resulting copyright is of the returned data. If you were to build a database based on the results, what license or copyright status this would be. Would all rights belong to me, or would Google claim rights over the results.