The Girls Around app fiasco is breaking a story (long in coming) about the implications of the data exhaust we create on social networks being something that could be put to somewhat questionable use. Four Square, the primary vector for location in this particular case, has shut them down already and the news cycle is such that this broke at a point where it will probably fail to jump from the tech press to the mainstream early next week, but this is by no means the last we've heard of this particular story. For the best summary of both it and its implications, there is no one better than Charlie Stross, not only one of the best sci-fi guys around but a particular shrewd commentator on all things technology as well.
While we will see it come up again (especially before Facebook's IPO) the need to bring privacy to the forefront of the discussion with regular users will not go away if most of this data gets hidden behind the application silos and removed from the API. In fact, as the "Target knowns if you are pregnant before you do" scandal showed, it turns out that this kind of thing can happen even when you don't realize that you are "the product" because your primary relationship with the business is one where your eyes are sold to ad units. Even if you are buying something you walk out of the store with, if what you do generates database rows, it can be used against your best interests.
Data exhaust will likely be one of the most important externalities we'll have to deal with in the coming decade and whether we like it or not, the advances in predictive analytics and "big data" is only likely to exacerbate the problem. It's good to keep that in mind as we give up vertical pixels to Google's attempts to mine who we are on their front page (yes that is the heinous bar at the top) and fork over loads of preference/curation/purchase data to some of the other web stacks.