RE: Privoxy, I like the TOR/FireFox portable myself, though don't use it for everything. FWIW I also agree, clif_notes, about just ignoring ads etc... I wound up removing, with a big sigh of relief, the CA AV software suite - when you block everything a lot of sites just won't work, so you're forever adding exceptions. While I wish I didn't have to make the choice in the 1st place, & while ads etc are annoying, the extra effort spend circumventing them didn't bring with it real or practical benefits.
Otherwise I've enjoyed the more philosophical arguments so far -- personally I try always to keep it simple. From my perspective, everything on-line may be virtual, but it's still a market driven society. If there's a catch, it's that there are so many kinds and types of currency driving it. One of those is perceived (self or otherwise) power &/or credibility... Some of power's benefits go to ego - some translate into hard cash in the off-line world. Often it's a very long-term investment, and often it's sought simply because others expect you to pursue it. Perceived power helps determine MSRP.
With a free product Google stands to gain more power (in all sorts of ways). It isn't really free, because besides cost for installation time/effort, users contribute to Chrome's popularity, & thus Google's power. Not using another browser takes away power from that browser's owners, increasing Google's relative, perceived worth. With Chrome, it's assumed Google will be able to maximize everything else they do to make money -- even when/if that's not true, perception that it is lets Google max their MSRPs.
Now while power does corrupt, I'm not sure that enters into anything, &/or that we as individuals enter into anything when it comes to Google corporate. We, us individuals, are in a virtual ant farm... We get moved here and there, some live, some die, and we get observed en mass as part of a song & dance (in this case) Google puts on to demonstrate to it's customers why MSRP is in fact quite a good deal. Sure their tracking practices can be subverted, by crooks and lawmen both, but all Google ever sees is one really big ant farm - I'd have to do something like drive into the side of the Google CEO's car at 50 mph before I ever became relevant enough to merit any interest, or be noticed as an individual.
That approach, sort of a privacy by virtue of inconsequence, applies most everywhere. I can undress in front of an open window, & the local PD's going to be concerned about what the neighbors saw rather than the fact that they invaded my privacy by looking in the window to start with. About the only time I, as an individual, warrant attention is when some individual (or small group of individuals) wants to take something from me - precisely what I want to avoid. SO, I have the same concerns about protecting my data, my privacy as the more ardent privacy advocate - just different reasons...
I'm also the guy that carries a laptop in the cheapest looking pack I can find - the nicer the laptop, the nastier the bag. What you can't avoid someone seeing, can be packaged to discourage interest.