If you’re concerned about the privacy implications of reading digital books, take a look at a nice guide put up yesterday by the Electronic Frontier Foundation.
The EFF’s guide includes a chart with answers to questions such as “Can they monitor what you’re reading?” for Google Books, Amazon Kindle, B&N Nook, Sony Reader and FBReader. Info on Google Books is based on the proposed Google Books privacy policy, and the guide notes that the B&N Nook has yet to ship and doesn’t yet have a product-specific privacy policy.
Some of the things noted in the chart, such as “Can they keep track of book purchases?” may not be necessarily bad. For example, Amazon uses your purchase history to offer book recommendations, which can be a nice feature. Still, it would certainly be good to have more information from Google and Amazon in particular regarding the information collected by the companies.