I was browsing around the net and found something about the Do Not Track option released by Mozilla in Firefox 4 beta 11. So I just thought I'd share my views about online tracking and the current status on it. The subject is a debatable one, from networking giants to the smallest corporates around the world, everyone tracks users. The purposes of tracking are for advertising their products and keeping records of customers.
Some of the following facts may be technical, but read on, because everyone using the Internet must know this.
Understanding web relationships: 1st party vs 3rd party
To put it in simple words, there are two relationships between the web user and a website.
The 1st party relationship is where the user visits a website and the website provides services based on signup. The user is generally aware of this relationship.
The other relationship is the 3rd party relationship, where the user connects to a website through another website's actions. The user is mostly unaware of this relationship.
Likewise, web-tracking is also of two types:
1st Party Tracking
This involves tracking a user across multiple web servers that work together to provide a web experience through login and session based information. For example, Gmail and Orkut, this basically uses a single account to provide different services. There are also even more complex forms of 1st party tracking.
3rd Party Tracking
This is generally based on behavioural advertising, where a user's search keywords are used to identify their needs. These are then aggregated into a single user account and maintained by the server.
For example: Google Analytics provides services for 3rd party sites. When the user searches across multiple sites using their account (which is basically a 1st party relationship and tracking), Google aggregates these into an account and provides it to the corresponding websites, which is totally legal.
Current solutions and their problems
Now let's get to the point about various efforts to stop this tracking:
Services like NAI do work, but some basic flaws mean they don't work absolutely for users to fully opt out.
Ad blockers work to a certain extent but also block required pop-ups and do nothing to stop the tracking.
There are also some other services which seem to have their own disadvantages.
Mozilla's Do Not Track system
Mozilla's approach is the Do Not Track system. It's basically set by clicking the checkbox with the 'Do Not Track' option in the browser settings, which sends out a header that tells websites that the user wants to opt out of behavioural tracking.
When the user visits the website, it clearly shows the user's intent to opt out of the tracking. But the problem is that it doesn't stop the website from maintaining an account. All it does is stop the services provided by 3rd party servers when the user is logged into a 1st party server.

This clearly mentions the user's intent to opt out. If the user finds the website using behavioural data elsewhere, the user can take legal action against the website.
Also, this system needs the servers' initiative to work effectively, as some web servers don't have explicit opt-out options.
The bottom line
Finally, I think this is the most powerful and best system for consumers we have right now. It's not perfect, it relies on websites actually respecting the signal, but it's a solid step forward in giving users control over their online privacy. The debate about online tracking will keep going, but at least Mozilla has given us a practical tool to express our preferences clearly.
Cheers.