Everyone should take their personal data seriously, and the people behind TaintDroid are about to help us all with that. It's a joint project between Intel, Penn State University, and Duke University that monitors the private data that third party applications request from your Android phone, using a scientific technique called "dynamic taint analysis". In a nutshell, TaintDroid will monitor applications and alert you when one tries to send personal identifiable data from your device. It won't tell you that this is good or bad, just what is being sent and where it's being sent to. You can then use the information and make that determination for yourself -- it's all nice and neutral in a very clinical way.
While Android does tell you what sort of permissions an application will have access to, many users ignore those warnings or simply don't understand them. That's where a service like TaintDroid could be very, very handy. They have a very nice FAQ and video demo of TaintDroid in action at their project page, which you can find at the source link. Thank goodness Android is a platform open to this sort of application, rather than not approving it to protect developers, then preventing most to install it since it's not "endorsed" by someone in California. Be sure to check it out, and as soon as it's made available for the average Joe (hey that's us!) we'll let you know. [AppAnalysis]