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I am not sure what an app can do to me if it is able to discover my account, to what extent?

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This permission is of moderate-high importance. This allows the application to read what accounts you have and the usernames associated with them. It allows the app to interact with permission related to that account. An example would be an app that was restoring your contact, would discover your Google account then send you to Google's login screen. It doesn't actually get to see your password, but it gets to work with the account. This is also legitimately used by applications to add contacts to your accounts, such as dialer replacements and contact managers/backup/sync/etc.

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Thanks, but still a little confused. Am I right that: even if the application discovers my account (and thus knows my email address), it still needs to get my additional explicit permission to interact with my Google account (e.g. Google Reader asks for my permission on first run)? – user2722 Dec 7 '11 at 3:56
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@danteisnotaGeek It would need the "Use Credentials" permissions to actually use that account (it doesn't share your password, but an authentication token, sort of like how OAuth works on Twitter and Facebook). – Bryan Denny♦ Dec 7 '11 at 6:29

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