I'm sure it does heaps.....but it also tells Hilton who are the customers worth keeping and who are the um, not so worthy recipients. For HH real stayers, I think it probably means excellent service, for those others it may mean someting else.
If you're staying with hotels regularly and are a relatively pleasant guest, I can't imagine that this would be a problem. It's possible to be an exacting guest and expect a high level of service if you stay a lot. If you're someone that demands discounts, or if you took advantage of the Hampton Inn satisfaction guarantee a lot ("Satisfaction Guaranteed, or you stay free"), then it would be something that would be recorded against you (I've seen this mentioned in Hilton presentations I found on the web).
I remember a while ago that OnQ was used as a decision support tool - for example if a hotel is near capacity, and a casual non-HHonors customer wanted to extend their stay but they had a reason to believe that an HHonors Diamond guest was coming to stay (even if unconfirmed), OnQ would allow the front desk to refuse the casual person's request in favour of making the room available for the Diamond guest. It might result in rooms going missing, but the majority of a hotel's profits come from the top tier members. I was reading something earlier today that suggested that top tier members are 2% of the hotel's guests (i.e. Diamond) and earn the hotel 25% of their revenue - the next 18% are second tier (i.e. Gold) and earn the hotel 55% of their revenue. In this case, everything is focussed on making sure that the member is kept happy - including past service recoveries. If you were bumped from a busy hotel, then that would appear in service recoveries and they would be making sure you weren't the one that was bumped again, and when you next stayed in another Hilton, the front desk staff would have information and could apologise for your last stay at another hotel.
From what I've read, the information that is available in OnQ is quite breathtaking - they know a lot about you, what you buy, whether you're likely to take a paid upgrade, whether you tend to eat in house, whether you would take up a discounted promotion (like bonus points for dining in the hotel). I have had a consistent billing problem with Hilton Sydney over the last few stays and it has gone relatively high in Hilton Sydney. I have had assurances that they have put in place steps to prevent it happening again. I expect that there is an entry in OnQ in "service recoveries" about this.
What I don't know is whether feedback you give (such as from feedback cards) appears in your profile. If I was Hilton, I would absolutely be doing this. If you particularly comment on a particular staff member, then I would be making sure that they are providing you with service again when next you visit. That sort of stuff.