Google will soon display your Google+ photo when you call an Android phone
engadget.com
engadget.com
The called Android phone has to obtain the "correct" photo in some way. The least horrible implementation I can see for this is a local query to the G+ app installed on the phone, to check if the caller is in your circles.
However, any online photo check, as implied by the article, will send a caller's phone number to Google, allowing them to collect data about all the people you receive calls from.
Update: the original source [0] writes that G+ is queried both for incoming _and_ for outgoing calls! Time to call your data protection commissioner!