I started writing this entry while thinking about the "if you have nothing to hide, then you have nothing to fear" fallacy. What do you say to someone who says that they have nothing to hide, or that some information about them is worthless anyway, so they don't care about some violation of their privacy? What do you say to a police officer who says that if you have nothing to hide then you have nothing to fear by answering questions? It implies that if you refuse to answer then you're probably "not innocent". That "pleading the 5th" is now used as a joke to admit guilt in light banter, is a sign of how pervasive the fallacy has become. It's followed closely with "where there's smoke there's probably fire" when discussing someone's arrest, trial, or refusal to answer questions. However, in the field of information security, it is an everyday occurrence to encounter people who don't realize the risks to which they are exposed. So why is this fallacy so irritating?
Those kind of statements expose naïveté or, if intended as a manipulative statement, perversity. It takes a long time to explain the risks and convince others that they are real, and that they are really exposed to them, and what the consequences might be. Even if you could somehow manage to explain it convincingly on the spot, before you're done, chances are that you'll be dismissed as a "privacy nut". In addition, you rarely have that kind of time to make a point in a normal discussion. So, that fallacy is often a successful gambit simply because it discourages someone from trying to explain why it's so silly.
You may buy some time by mentioning anecdotes such as the man falsely accused of arson because by coincidence, he bought certain things in a store at a certain time (betrayed by his grocery loyalty card) 
. Or, there's the Indiana woman who bought for her sick family just a little too much medication containing pseudoephedrine, an ingredient used in the manufacture of crystal meth 
. Possibilities for the misinterpretation of data or the inappropriate enforcement of bad laws are multiplied by the ways in which it can be obtained. Police can stick a GPS-tracking device on anyone they want without getting a search warrant 
or routinely use your own phone's GPS 
. Visiting a web page, regardless of whether you used an automated spider, clicked on a linked manually, perhaps even being tricked into doing it, or were framed by a malicious or compromised web site, can trigger an FBI raid 
(remember goatse? Except it's worse, with a criminal record for you). There are also the dumb things people post themselves, for example on Facebook, causing them to lose jobs, opportunities for jobs, or even get arrested 
Regardless, people always think that happens only to others, that "they were dumb and I'm not" or that they are isolated incidents. This is why I was delighted to find this video of a law professor explaining why talking to police can be a bad idea 
. Even though I knew that "everything you say can be used against you", I was surprised to learn that nothing you say can be used in your defense. This asymmetry is a rather convincing argument for exercising 5th amendment rights. Then there are the chances that even though you are innocent, due to the stress or excitement you will exaggerate or say something stupid. For example, you might say you've never touched a gun in your life -- except you did once a long time ago when you were a teen maybe, and forgot about it but there's a photo proving that you lied (apparently, that you didn't mean to lie matters little). People say stupid things in less stressful circumstances. Why take the chance? There are also coincidences that look rather damning and bad for you. Police sometimes make mistakes as well. The presentation is well-made and is very convincing; I recommend viewing it.
There are so many ways in which private information can be misinterpreted and used against you or to your disadvantage, and not just by police. Note that I agree that we need an effective police; however, there's a line between that and a surveillance society making you afraid to speak your mind in private, afraid to buy certain things at the grocery store, afraid to go somewhere or visit a web site, or afraid of chatting online with your friends, because you never know who will use anything you say or do against you and put it in the wrong context. In effect, you may be speaking to the police all the time but don't realize it. Even though considering each method separately, it can be argued that technically there isn't a violation of the 5th amendment, the cumulative effect may violate its intent.
Then, after I wrote most of this entry, Google CEO Eric Schmidt declared that "If you have something that you don't want anyone to know, maybe you shouldn't be doing it in the first place" 
. I'm afraid that's a realistic assessment, even if it's a lawful activity, given the "spying guides" published by the likes of Yahoo!, Verizon, Sprint, Cox, SBC, Cingular, Nextel, GTE, Voicestream for law enforcement, and available at Cryptome 
. The problem is that you'll then live a sad life devoid of personal liberties. The alternative shrug and ignorance of the risks is bliss, until it happens to you.
 Brandon Sprague (2004) Fireman attempted to set fire to house, charges say. Times Snohomish County Bureau, Seattle Times. Accessed at http://seattletimes.nwsource.com/html/localnews/2002055245_arson06m.html
 Mark Nestmann (2009) Yes, You ARE a Criminal…You Just Don't Know it Yet. In "Preserving your privacy and more", November 23 2009. Accessed at http://nestmannblog.sovereignsociety.com/2009/11/yes-you-are-a-criminalyou-just-dont-know-it-yet.html
 Chris Matyszczyk (2009) Court says police can use GPS to track anyone. Accessed at http://news.cnet.com/8301-17852_3-10237353-71.html
 Christopher Soghoian (2009) 8 Million Reasons for Real Surveillance Oversight. Accessed at
 Declan McCullagh (2009) FBI posts fake hyperlinks to snare child porn suspects. Accessed at: http://news.cnet.com/8301-13578_3-9899151-38.html
 Mark Nestmann (2009) Stupid Facebook Tricks. In "Preserving your privacy and more", November 27 2009. Accessed at http://nestmannblog.sovereignsociety.com/2009/11/stupid-facebook-tricks.html
 James Duane (2008) Don't Talk to Police. http://www.youtube.com/watch?v=i8z7NC5sgik
 Ryan Tate (2009) Google CEO: Secrets Are for Filthy People. Accessed at http://gawker.com/5419271/google-ceo-secrets-are-for-filthy-people
 Cryptome. Accessed at http://cryptome.org/
Last edited Jan 25, as per emumbert1's suggestion (see comments).