Not entirely true - look at the GoogleLady.com blog. It's been up and running for quite some time now, and she's not affiliated with Google. Personally, I agree in that he should drop it (I wouldn't try developing a domain with Google in it) but you just never know!
i have heard a few things about having google, youtube in your domain, some say that you can and other say stay well away... i guess if i was you i would do a little research b4 you take the next step JUST MY 2 CENTS
Yes I read any major name in a domain name is an infringement of trademark. Imagine if you get it all set up and earning money and they shut you down then take you to the 'cleaners'.. I'd drop it now too. Shame but 'thems the rules' It is a wonder the place you bought the domains allowed it but I suppose a few get through.
I agree that you should drop it. It is not worth the risk of being sued by google. I would focus on developing other domains if you have them.