There’s been continuing drama over Cryptome, a site that… Well, here it is from the horse’s proverbial:
Cryptome welcomes documents for publication that are prohibited by governments worldwide, in particular material on freedom of expression, privacy, cryptology, dual-use technologies, national security, intelligence, and secret governance — open, secret and classified documents — but not limited to those. Documents are removed from this site only by order served directly by a US court having jurisdiction. No court order has ever been served; any order served will be published here — or elsewhere if gagged by order. Bluffs will be published if comical but otherwise ignored.
Some of the drama was over this document, which contains Microsoft’s policies for providing information to police, including advice to the cops on what to ask for and how to ask for it.
I’ve read it, and it’s actually pretty benign, aside from Softie’s DMCA action over it. The part about XBox Live is the most intrusive. Microsoft preserves, forever, every IP ever used to talk to your 360 and the title-and-time of every game you’ve ever played while online, as well as obvious stuff like your GamerTag and credit card info.
MSN conversations, interestingly, aren’t retained server-side at all. This has been a big worry of mine and my more paranoid friends for a while.
That said, you should still encrypt basically everything. 