If you use the mobile Google Maps application on a phone that has GPS, you're sending Google real-time traffic information. "When you choose to enable Google Maps with My Location, your phone sends anonymous bits of data back to Google describing how fast you're moving. When we combine your speed with the speed of other phones on the road, across thousands of phones moving around a city at any given time, we can get a pretty good picture of live traffic conditions," explains Google.
It's an interesting way to use GPS information on a grand scale to solve practical problems. Many other Google services collect data that help Google develop new features: GOOG-411 collects voice samples that train Google's speech recognition systems, Google queries anticipate flu activity, while query refinements improve Google's "did you mean" feature.
Apparently, this new source of data allowed Google to expand the traffic feature to arterial roads. "Commuters have long relied on traffic sites to help them determine their last-minute path around poor traffic on the highway. But if the traffic looks bad on the highways, you'll probably want to know how it looks on the alternate routes through arterials," explains Google LatLong.
For now, Google Maps provides live traffic data for a small number of countries (US, UK, France, China), but crowdsourcing could expand its availability.