This census stuff IS totally confidential, and genealogists* will tell you it's CRUCIAL to participate! Also, of course it helps your community get federal funding! I read yesterday that for every person who is counted, it's worth about $13,000 worth of benefits for your area! Not to mention district decisions for voting are based on these statistics :)
Finally, if we send it in, then the Feds don't have to spend as much of OUR money to follow up in person with door to door interviews :)
Get involved - just do it.
The Associated Press: US census forms arrive in the mail: What to expect
*(I'm a hack genie)