This post is a review of the article: http://www.time.com/time/printout/0,8816,1531312,00.html
First of all I think it is important to make a different between work and private life. What you do at home in your private life is completely your own business, but at work you are paid to do a specific task. If I were to employ people to do a work, I would not accept them to deal with private life while being paid. Therefore I think it´s a nice tool to control what the employees do and keep working.
But when it´s come to private life I think the opportunities to “spy” is a threat to private premises. What you do outside the work should not make any difference if you do your work properly. But of course there are excepts and you can misuse your position in the company by doing inappropriate activities in your private life.
The conclusion I make from the article is that one must be aware of the fact that what you´re doing on the net is not a secret.
/Paul