On the way to work this morning I was listening to the Silver Bullet podcast interviewing Dr. Lorrie Cranor (Comp Sci professor at Carnegie Melon). I recommend listening to this episode if you’re at all interested in privacy in the digital age and how it has been evolving. Actually, how is society reacting or non-reacting to privacy in a new medium. There are some interesting studies about how well people can decipher privacy policies and how most companies keep their policies convoluted. An interesting mention is the idea of having privacy policies follow a “nutritional label” format which would be great for the layman like myself to read 
Cranor helped create the P3P Standard: http://www.w3.org/P3P/ It’s been approved by the W3C and has even been supported in IE6-8. Sadly, I don’t think many webmasters are aware of it.
Dr. Cranor also mentions how Google is making an attempt to clarify their privacy policy as folks start to wonder if Google can reach the point of too much information (Enemy of the State and Minority Report). Long story short, Google is creating video’s with real people explaining the privacy policies of their different applications. Kudos to Google on this: http://www.youtube.com/user/googleprivacy
Google is also operating a site termed ‘The Data Liberation Front’. The mission “is to make it easier for users to move their data in and out of Google products.”
http://www.dataliberation.org/