It knows my Twitter network, of course, and that's helpful for search results (someone I follow on Twitter blogging about some arcane JRuby tidbit I'm searching for is great).
If this is what Google's leaning on for their new social graph stuff, though, they're in trouble: it knew very little about my real-life friends. In other words, the friends that Facebook knows about. You can't glean that from Gmail contacts necessarily, since I don't really use email for that type of correspondence. If they really do want to flesh out a social graph of their own to combat Facebook, they have to roll their own social network. Maybe it's coming, maybe it's not; I just think they're only getting part of the picture right now.