There is a lawsuit and a criminal investigation underway resulting from a school outside of Philadelphia that secretly took pictures of students with webcams on laptops supplied by the school.
The idea was to use the webcams only in cases where a laptop was reported stolen. It is alleged however that school officials turned on the webcams simply to spy on the students for their own curiosity.
More details and commentary can be found on Techdirt, Boing Boing, and this AP story.
It's hard to sort out reality from posturing, but it doesn't look good for the school.
A couple of lessons can be learned from this.
First, people are a real weak link in the need to preserve privacy where any kind of surveillance or tracking is possible – despite good intentions behind the system.
Second, if you must use any kind of system that enables surveillance, take all possible steps to limit access, and make clear to those that have access that they will be held accountable if they misuse it.
See also John Gregory's post on Slaw about the scandal when it broke: Spying on Students Through Their Computers