Guys, Intel already indicated that users can shut off camera on its Internet TV Box
So I think that Intel is well aware of user discomfort with the idea and privacy issues.
Definitely having a live camera aimed at you in your living room is extremely intrusive. IMO, if Intel has any insidious thoughts of using this camera in future to get advertising data, it will have to rethink its plans.
But keep in mind that the camera can be used for video chats (Skype, etc.) and video conferencing. That will be a neat feature to have on your set-top box.
Being able to disable the spying feature is good, provided doing so doesn't make the consumer pay more for the service. I would question the effectiveness of using the camera for Skype or any videoconferencing as most people have their settop box benath the TV or behind the glass door of a wall unit. And most new HDTV's are too thin to support an equipment box.
In the most likely settop box location the Intel camera would be about crotch level for people watching TV on their sofa. And don't think for a moment that dangling the carrot of living room videoconferencing will make spying on families acceptable.