Darned noprocrast meant I can't edit this comment from my normal account. So here is a better formatted version:

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A decentralized, opt-in version of randomwalker's well thought out donottrack proposal (http://donottrack.us/) would allow users to balance privacy vs. benefits. Including "X-Do-Not-Track" in an HTTP header is an excellent idea; including it in a piece of legislation is much less so.

Opt-out sites would be more private, but would offer less in the way of features, functionality, and personalization (both directly and indirectly because of the massive hit to monetization). Specifically, I don't think many people realize just how many features on the modern web are enabled by tracking of some kind or the other. A short list:

1. UI optimization via event logging

2. Features like priority inbox in Gmail

3. Bubble up in search rankings

4. A/B testing

5. Google Analytics (determining backlinks to your site)

6. Disqus login for blog commenting

7. Google Maps or location based service integration

While the proposal is about opting out of "third party web tracking", it is not obvious what a third party is. Is a Google Analytics or Facebook Connect plugin which I chose to integrate into my site "third party code"? What if I have a business account with something like Crazyegg.com -- can I put their JS heatmap tracking in my webpage to figure out what buttons my users are getting confused by?

And if this is complex for hackers, do you trust the government that thinks the internet is a series of tubes to get this right?

Moreover, there is one throwaway sentence in the article which deserves underlining:

  It also wants to ensure that any restrictions do not impede law enforcement and national security efforts.

Translation: the government will want Google and others to track you anyway, so that they can find you when they want. So this is sort of reversed: true privacy legislation would mean the guys with guns wouldn't be able to track you. I'm a lot more scared of them than the guys trying to sell you "one weird old belly trick".

Remember that the government which is now talking about protecting your privacy is the same one which is making the very pilots themselves go through backscatter stations on the way to their planes, the same government that forced phone companies to tap your phones and forced Google to give them your email 9000 times per year.

In my humble opinion, the solution to this kind of thing is not to throw up our hands and pray for this latest batch of Congresscritters to deliver us from evil, but for someone to build a private browser, with something like a built-in accessible Tor, which provides a better experience for those people who value privacy over functionality.