And Google's Streetview wifi data hoovering means thay've got a pretty good database of wifi access points to geographic co-ordinates. And I bet they're not the only ones building that database. I'd bet pretty good money that there was no ethical oversight or data retention/protection policy in place befre this started: http://www.brisbanetimes.com.au/technology/security/police-t...
Near as I can tell, the privacy threat here is very specific. You come within a few hundred feet of a hotspot, and for as long as you are in that location, the hotspot receives polling messages with your MAC address. The hotspot's operator can in theory log information like "device with MAC address 00:11:22:33:44:55 was within a few hundred feet of [hotspot location], Sat Jul 14 from 00:29:05 to 01:13:22".
How big of a threat this is depends on:
1. The difficulty of mapping a phone's MAC address to an individual. Do we know this is easy? Is there a big database with this information? A quick search suggests that it's possible to spoof the MAC address on a rooted phone, so it could be configured to change randomly every few hours. That would seem to defeat this attack on privacy, though doing so may be outside the technical know-how of most people.
2. How common is it for those who operate hotspots to log, aggregate and share this data? I'm confident the locally-owned cafe down the street doesn't log this data. What if it's something corporate-owned, like a Starbucks? Is this kind of logging, sharing and aggregating to track users just a theoretical possibility, or is it actually commonplace? I'd suspect the former.
I don't have answers to the questions I posed above. But barring evidence to the contrary, I strongly suspect that setting a smartphone to wifi only makes location tracking go from trivial to at least moderately difficult.
I suppose that you might be able to try tunneling all of your outbound data through a VPN tunnel, but at that point you might as well go back to using internet cafes and phone booths.
I prefer misdirection. Set up a device that will appear to be 'you' in many places at once. For instance, google and facebook both routinely believe that I commute from New York to London at least 15 times a day.