It's not
just the Bing Toolbar; it's also (certain features of?) IE.
From TOFA at
http://searchengineland.com/google-bing-is-cheating-copying-our-search-results-62914Microsoft does disclose that Suggested Sites collects information about sites you visit. From the privacy policy: When Suggested Sites is turned on, the addresses of websites you visit are sent to Microsoft, together with standard computer information. To help protect your privacy, the information is encrypted when sent to Microsoft. Information associated with the web address, such as search terms or data you entered in forms might be included. For example, if you visited the Microsoft.com search website at http://search.microsoft.com/ and entered "Seattle" as the search term, the full address http://search.microsoft.com/results.aspx?q=Seattle&qsc0=0&FORM=QBMH1&mkt=en-US will be sent. I've bolded the key parts. What you're searching on gets sent to Microsoft. Even though the example provided involves a search on Microsoft.com, the policy doesn't prevent any search -- including those at Google -- from being sent back.
It's worth reading the IE privacy policy to see what all they reserve the right to do with what you do in IE. I don't see the limitations regarding which components specifically will spy on you; some mention it specifically and then there's a broad statement about recording what you do and sending it to Redmond.
IMHO, that's the real story here. That, and the fact that people apparently still need reminding that MSFT is an advertiser just like GOOG, just less successful at it to date.