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I just used Genius this morning for the first time and was impressed by the results. It instantly created a playlist of songs that worked well together and included some I had forgotten I had. It's great for when I'm too lazy to make a playlist myself or when I'm pressed for time, such as before a dinner party and guests are almost there.
It's not that anything nefarious could be done if the government somehow found out what your favorite playlists are--by themselves. However, Genius adds to the totalilty of the information out there which is now gathered about your web surfing habits, shopping preferences, the type of books you read at the library, medical information, etc.
For example, an insurance company could see that you've taken anti-depressants at some point in your life *and* determine that a certain playlist on your ipod has depressing music in it -- and determine that you would be too much of a risk and deny coverage.
Another example may be that a few books you read about the Taliban gets noticed by someone *and* a playlist on your ipod contains music with an anti-government message on it. Suddenly, you find you're on the watchlist when you go to the airport and can't board a plane.
You may think its nuts that a company or government agency could look at the music you listen to that way--but they already do. Hello, Patriot act?