German objections to Street View date back at least a year and a half, and by all accounts, Google still hasn't come close to convincing the German government that the program is harmless. Just the same, Google's announced its intention to move forward with Street View in Germany within the next 10 months.
Google almost seems to have given up on the idea of discussing the matter. The AFP reported this afternoon that Arnd Haller, the head of Google's legal team in Germany, said, "It is difficult to forbid a company to do something that is legal."
As for what the conflict is about, well, the introduction of face- and license plate-blurring software hasn't gone nearly far enough for some people's liking. A Deutsche Welle article explained, "Consumer Affairs Minister Ilse Aigner is demanding that the Internet giant only displays its imagery after each affected German citizen has given his or her permission."
There are pushes to make Google position its Street View cameras lower, too (so that photos can't be taken over the tops of fences and walls), and perhaps blur whole buildings upon request.
It should be interesting to see what happens next. By moving ahead, Google may be risking a government-backed lawsuit - or even new legislation - and a victory or loss could have a huge effect on how other countries respond to Street View in the future.