its called TIVO.. and it tracks what you watch and when you watch it

Ah-hah! Thanks Helen, you've answered a question I posed above:
http://wordsmith.org/board/showthreaded.pl?Cat=&Board=words&Number=76739
TIVO, I believe, is primarily a "hard disk" VCR, i.e. it stores TV programmes in digital format. In the case of cable TV, certainly, the transmission is also in digital format, and this is the way everything is going.
In areas where you can't get cable, you can still get "satellite" TV - fairly big in the UK. That used to be in analog(ue) format but is now almost all digital, which makes much better use of the bandwidth and allows extra features. In the bandwidth previously used for one channel you can now incorporate several "sub-channels", allowing varying viewpoints of a match, a choice of matches to watch, interactive news channels (brilliant, these) etc.

Presumably these are the same features offered by cable TV in the US? And what's the state of digital transmission over the airwaves in the US? Big drive on that over this side of the Pond, though not entirely successful as yet..

In terms of "being watched", digital transmissions are fed through a set-top box/digitizer that has a certain amount of memory (a lot in the case of TIVO, which is also a digitizer). If the digitizer is connected to a phone line or cable, it can share information with a central database. I'm sure the companies would assure you, as on the Web, that no individual information is retained...

Also check out White Dot's perspective on this front:
http://www.whitedot.org/
It's half-run by someone I used to work (and argue ) with, but don't let that put you off.

i am very reluctant to 'conduct business', banking, purchaces, etc over the internet
Well, your credit card info is pretty damn safe these days, as long as you have a Secure Sockets connection (padlock shown in most browsers). Really that's just a matter of how much you trust the company you're dealing with, and credit card fraud in (for instance) restaurants is much more commonplace. Other than that, individual tracking depends mainly on cookies; and there's a lot of software available that can block cookies, with varying degrees of selectivity. As a huge bonus, these products can often also block ads.

If you don't have a personal firewall and an automatically updated virus checker these days, then you could be giving away much more than consumer information.

We all need to know how we're being watched, though. It's not necessarily a problem. Credit Card companies and banks have known our buying habits for years.

Oh, very appropriate mention of Fahrenheit 451, W'ON. Another allegorical piece of SF, isn't it? Aspects of the present projected and polarised to make a very important point.