Google SSL Search allows end-to-end encrypted search solution between your computer and Google. This protect your search terms and your search results pages from being intercepted by a third party. This provides you with a more secure and private search experience.
SSL (Secure Sockets Layer) is a protocol that helps provide secure internet communications for services like web browsing, e-mail, instant messaging, and other data transfers. When you search over SSL, your search queries and search traffic are encrypted so they can't be read by any intermediary party such as employers and ISP.
It works in the same way online banking or other login pages work. Using Secure Sockets Layer connections, the connection between you and Google is encrypted, so that third parties, beyond you and Google, cannot look at your search data.
An encrypted connection is created between your browser and Google when you search on https://www.google.com. This beta service only works with traditional search results. Encrypted connection may lead to slightly slower results. Encrypted search does not mean Google no longer stores your search data - it only means third parties cannot listen in to the connection between you and Google. Searching over SSL doesn't reduce the data sent to Google - it only hides that data from third parties who seek it.