I never installed Google Toolbar, yet it shows up under applications in CCleaner. Now, I did accidently install Google desktop that came bundled with Divx (hate bundled software). I Uninstalled that and deleted the Google folders left over. I never checked if this entry was there before this. Are there certain registry keys that I should delete to completely remove this Google entry both from my computer and CCleaner? Thanks!

Other people have reported detected applications that they removed, which detailed into having to remove left over remnants in the Windows registry. Before you edit the registry make a system restore point if you're on WinXP, and also a known good registry backup using ERUNT (freeware, no adware or spyware).

Should I just delete the keys that CCleaner recognizes as belonging to Google in winapp?

No, it isn't necessary to edit the default installed .ini files, CCleaner is detecting it because it's left-over junk "obsolete software" from the uninstall program.

When running the Issues scanner (registry cleaner) if CCleaner shows those Google entries allow it to remove them, and do create the backup CCleaner pops up when you click the 'Fix selected issues...' to a folder such as My Documents. After a few days you can delete the .reg backup created by CCleaner.

Edit:
If CCleaner can't remove the reference you can manually remove it using RegEdit. It will probably be listed under one of the following areas or both:
HKEY_CURRENT_USER\Software
HKEY_LOCAL_MACHINE\Software