I strongly recommend people with viewpoints on either side of the argument to go read D. Solove's essay on the subject over at http://crysp.uwaterloo.ca/courses/pet/F07/cache/solove.pdf - it's quite short and a great read.
His "Understanding Privacy" work is a fantastic book which develops this and his other essays, and provides a great methodology for understanding the scope of - and breaking down the harm inherent in - modern privacy problems. I studied it for my Master's in Cyberlaw, and would highly recommend anyone with an interest in IT / cyberlaw / philosophy to track down a copy and read it. http://www.amazon.com/Understanding-Privacy-Daniel-J-Solove/...
It's a great read, and includes a section on the 'nothing to hide' fallacy