If you've downloaded an app from the Marketplace in the last few hours, you may have received the above pop-up screen before being allowed to continue. The "accept" part is for a new end-user licensing agreements (EULA) that seems to address the user-location tracking controversy that erupted a few weeks ago with a lawsuit. In that filing, it was alleged Microsoft was collecting user data without user consent. Microsoft at first hedged but later admitted that yes, there was a bug which sent user data before they had a chance to accept or opt-out of the location collection.
That bug was of course eliminated with the Mango update but there persisted another bug in the People Hub which is still present. That bug is set to be fixed in a later software refresh, presumably Tango. In the meantime, Microsoft is spelling all of this out in the new updated EULA where they tell us they are not using the data nefariously and how important our information is to them, yadda yadda.
The document is itself nearly 19 pages of text that explains how specific parts of the OS work when collecting data--what is being sent, can you be identified ("no"), why the information is being sent. They do this for email, internet, Office, Phone Feedback, People Hub, Facebook, Phone Update, Pictures Hub, etc. After explaining, Microsoft then shows you how to opt out or better control what information is being sent out--it's a pretty good guide, albeit a bit dry and lengthy.
What we quickly learn is wow, a lot of info is being sent to Microsoft and it'd take awhile to turn off. But we also learn that information cannot be used to track you, identify you or reveal personal information. In light of the Carrier IQ controversy, Microsoft seems to be showing all of their cards on the matter. Of course, only you know what you are comfortable with so head on over to the new EULA, read through it and you can decide your course of action: Windows Phone Privacy Statement.
Big thanks to Brandon H. for the photo and link!