What does the server see? I mean in case someone looks at the server data can he see all the addresses that are connected to one wallet?
Yes.
Though i guess the label sync plugin should be able to provide the same data, even for more than one wallet when using the same plugin website login.
I believe that data is encrypted before being sent to the server.
edit: see
https://bitcointalk.org/index.php?topic=154144.0