My reason for not using Gmail for LJ comment notifications: my LJ comment notifications are going to Yahoo, and I've got their IM program set up to give me a little alert window whenever I have new mail. Google does not have this feature. I am addicted to this feature. This is how I get things done while I'm actively participating in a conversation on LJ.
I think Hotmail's far creepier than Gmail. Hotmail looks as if it actively tracks the links you visit from your e-mail, and you have to go to great pains to get uncontaminated URLs out of your e-mail with them. The last time I checked, you had to enter your zip code to get a Hotmail account. When I tried entering a bogus/nonmatching zip code, Hotmail yelled at me. Gmail requires... a name. Not even necessarily yours. Plus... um... Hotmail's Microsoft. I have a certain degree of trust for Google. I have ... less trust for Microsoft.
Regarding Google text ads based on the e-mail: Google text ad relevance is a piece of surrealist humor, and it doesn't leave images in your web browser. Most webmail will aim ad banners at you based on what they try to collect of your personal information. I can't recall when I told Yahoo! that I live in Phoenix, Arizona, but a goodly percentage of the ad banners I get are aimed at my location. It was very refreshing to climb onto someone else's computer and see a different set of ad banners. Honestly, I think Yahoo's a metric pantload creepier than Google is.
A lot of my creepiness factor is based on what programs from companies do when they're installing on my computer. I have SpyBot Search & Destroy Resident set on fairly paranoid on my box, and it yelled about Yahoo Messenger, AIM, and MSN Messenger trying to shove themselves into my start-when-OS-starts queue without asking me. Google Toolbar did not cause yelling. Google Toolbar blocks popups. AIM causes popups, from time to time. Google Toolbar explicitly tells you in plain language about when it wants to phone home (the PageRank feature).
Yahoo mail also scans the text of e-mail. Did you know that? Send an e-mail to yourself, if you use their mail, with the word "expression" in it. Watch it come back "_expression". This is to prevent malicious script from running, which is a noble cause. It's still scanning your mail, and the same capabilities could be used to scan mail for the same sorts of keywords that the Gmail creepiness awareness site mentions. Hotmail replaces all text links with hyperlinks that open the link in a new, Hotmail-mangled window. This requires scanning every message for the string "http://" and replacing it, in the same sort of automated search that Gmail uses. I've never been
Regarding the storage limits, and how this will encourage users to leave more potentially sensitive e-mails in the storage for long enough to make the mail less subject to privacy laws: I don't buy that argument either. Let me hold up as an example my Yahoo account, 6 juicy megabytes of randomness stretching back to 1998 (when boojum recommended that I get a non-hotmail account because of a password exploit that would allow J. Random Cracker to get access to anything I left in my hotmail account). A small storage limit means that I will choose to delete messages that I think less important, and save only messages that I found important. Per megabyte, there is going to be more content in my 6 megabytes of classic Yahoo storage that I would take personally if it were dug into by a stranger without my best intents in mind than there will be in my Gmail account. Of course, when I label the messages as important, that's going to aid a hypothetical random stranger in finding out which messages deal with things I consider key, but there's still going to be more drek to wade through based on the sheer size of the account.
If you want any sort of privacy in e-mail, sheesh -- encrypt it. Don't store a non-encrypted version anywhere online. Any service you send non-encrypted mail through has the capability of storing it and searching through it at its leisure. This includes your ISP's own e-mail.