Generally I'm not the paranoid type, and I wouldn't say I devote much mental energy to the topic of "online privacy." I take it as given that every search engine, social networking site, and free email service is collecting staggering amounts of data about me and my online habits. I also accept the fact that every email I've ever sent is probably stored in some gargantuan NSA database, every text message I've ever sent can be subpoenaed from my service provider, and any cell phone call I make is potentially being monitored. None of that is paranoia – it's just reality. These new ways in which we communicate offer very little privacy. Read up on ECHELON, 641A, Titan, the Interception Modernization Program, and all the other very real ways in which whatever expectations of privacy you might have are being compromised.
One thing we can stop, at least to some extent, is having information about our online habits packaged, sold, and put to various commercial uses. To that end Google, the 900-pound gorilla of online information harvesting, is altering its privacy policies on March 1. You can limit the amount of information you surrender and the extent to which it is used for commercial purposes by opting out. Quoth the Electronic Frontier Foundation:
To opt out, follow these simple instructions: sign in, go to google.com/history, and choose "Remove All Web History". This also revokes your consent to have your search history recorded going forward.
Let's not kid ourselves, we'll probably learn a few years from now that they're recording all of our search habits anyway (Shocking scandal! Online giant becomes Big Brother and sells out users!) but I don't see any reason to give them the satisfaction of consenting to it.