Quick Help….Genius – iTunes?

I kind of have an idea of what this is, but can someone explain further. Also i was about to activate this through my iTunes and it showed me 3 steps.
1. Gathering information about your iTunes library
2. Sending this information to Apple
3. Delivering your Genius results.
Im a little worried about the 2nd step, as not all of my tunes are bought
Is it safe for me to go ahead with these steps?
I need a quick reply please
Answer #1
Genius
The Genius feature, introduced in iTunes 8, automatically generates a playlist of songs from the user's library which are similar to the selected song. Genius playlists are created by the ratings system and collaborative filtering. An iTunes Store account is required because information about the user's library must first be sent anonymously to Apple's database. Algorithms determine which songs to play based on other users' libraries, and Genius becomes more intelligent given a larger data set. The resulting Genius playlist can contain 25, 50, 75, or 100 songs and can be refreshed for new results or saved. The iTunes Sidebar recommends selections for purchase from the iTunes Store based on the selected library track.[36] Once Genius becomes active in iTunes, it can be used on current generations of the iPod Classic, iPod Nano, iPod Touch or the iPhone.[37] iTunes 9 added Genius Mixes, where the Genius software finds similar music and automatically puts them into mixes.[38]
http://en.wikipedia.org/wiki/ITunes#Genius
No need to worry about anything… Just use it and you won’t be in any kind of trouble…
Cheers