Google is the largest advertising and user-tracking system online. I would only use those DNS servers as last resource.
Also your DNS request travels unencrypted through your ISP and a likely drop-in solution to packet inspection would just be a passive listener (typical solution with 0 configuration). So in this case, alternative servers don't help.
We don't correlate or combine your information from the temporary or permanent logs with any other data that Google might have about your use of other services, such as data from Web Search and data from advertising on the Google content network.
You are diverting the discussion. The main point of that comment is the ISP can inspect those packets just like if you use their servers (and probably by exactly the planned way to do it in the first place.)
With regards of privacy, Google's definition of what's identifying or not is very dodgy. From your own link, the permanent record includes the timestamp, domain, geolocation and ISP. That's a lot of information if you aggregate it.
Down-voted for posting a link to a privacy policy? Hmm. Ok.
My point had nothing to do with your ISP packet inspection argument (notice I didn't address it). I was providing a counter-point to the "Google is the largest advertising and user-tracking system online. I would only use those DNS servers as last resource." My comment was simply to refute your indication that Google might be associating DNS with advertising or user tracking. They don't.
Edit: Can someone explain why the down-votes? Do you just disagree?
They will still be learning a lot about users, just not adding that to their otherwise neat idea they have about who you are. You have two identities; they can track, study and serve each one, no probs.
I then remembered that you can switch to alternative DNS providers. Google's comes to mind, because its 8.8.8.8 address is easy to remember.