Don't Be Evil applies here.

If you get to the point where you're asking "how can we screw our users without getting sued?" things have gone very very wrong.

It's often "how can we serve our users without getting sued?" A user can sue because they find the colors on your site depressing.

Yes, but California is also very sue happy. Better safe than sorry is sometimes a necessary and relevant strategy.

Not just privacy. Any consumer class action -- as long as AT&T Mobility holds -- can theoretically be avoided by a well-drafted arbitration/class-action waiver clause in the site TOS or other customer agreement.

I'm not a lawyer, but if I remember correctly, things like TOS and EULA are not always legally binding, and can be invalidated if a judge finds them legally questionable.

Good point

When working on a startup there are so many things to think about. Avoiding Action Lawsuits... never seems to be a top priority. Advice worth thinking about and implementing +1.

Malware being served from that site (don't know if it's ads or what; my AV system quarantined JS/Blacole.IT).

Automattic.com (runs WordPress) has this wording in their Terms of Use. The put those terms under a Creative Commons license so that anyone can copy it and re-purpose it for their own needs.