It installs Spynet onto your computer which sends information to Microsoft about file behavior, including any software Security Essentials it suspects is pirated (which for me is no big thing). It also warns users that personal data might be "accidentally" sent to Microsoft (which is a big thing).

I don't know what sort of data Spynet gives Microsoft but without an opt out choice I can't see myself installing it. There are better less intrusive options out there.

Is this true?

This post seems a bit tinfoil-hatish.

Linky?  Otherwise this,

Spynet is also in Defender, and the likelihood of it sending anything all that interesting is extremely low.

So it's both true and 'tinfoil-hatish'.  Any data sent is encrypted and unlikely to be seen by anyone but Microsoft.

http://www.microsoft.com/security_essentials/privacy.aspx?mkt=en-us

U have to be doing something interesting for it to send something interesting.

Such a way with words!!   

Not that I've seen.  Every free option I've seen either has a horrid interface, intrudes into your system enough to break things, or just nags you to buy things.  All three are major negatives to me.

I actually paid for AVG because I respected their free version, and I wish I hadn't.  I only grew more and more disappointed with it.

"As a “basic” member of SpyNet, Microsoft Security Essentials will automatically send information to Microsoft to help Microsoft determine which software to investigate for potential threats and to help improve Microsoft Security Essentials' effectiveness."

The ability to send file information from your computer helps Microsoft fight adware,spyware etc... and is no big issue if you don't mind Microsoft taking information about your files. I just wish there was a choice not to have spynet on your computer.

Ticks all the most important bits, then....

And even if you had a driveful of (regular) porn, I don't think MS would give a sh!t.

For MS to act on (pass on) information it received, it would have to be very, very illegal... as in kiddy porn and/or terrorist related stuff. 

The piracy of MS/partners software (if/when detected) would also raise a red flag, I guess, but other than that, MS isn't likely to be interested.

Besides, how many Microsoft employees/human eyes are actually going to see all this data??  Probably few, if any!  Most likely it will all be scanned/detected by software components and seen only when troublesome and persistent red flags pop up. 

So unless one is doing something profoundly wrong/illegal, there should be few or no worries.

Hopefully, Spynet will be able to collect data on the proliferators of internrt nasties... and action is then taken against them.

Now for kona's cue......

I'd have trouble trusting this Spynet if it were a Google thing, however.

..... come in kona. 

Who mentioned porn?

I thought Google was a spynet starkers!!   

I did.... how naughty of me.

The thing is, I can't see MS paying hundreds of people to sift through umpteen trillions of bits of data to see who's looking at what.... and a few smutty pics/videos aren't likely to get Spynet popping up red flags unless they're infected/tainted by malware.

The funny thing is, I'm usually up for a conspiracy theory and recommending getting out the tinfoil hats... but not this time. 

I must be slipping/mellowing out in my old age.

Slipped in this little gem while I was posting...

How right you are.... took the words right out of my mouth.

I'm glad you did, though... takes some of the attention away from me.  Now mine won't be the only place those menacingly looking men in black stand menacingly outside of when they come around to do Google Maps.