While this is surely going to raise large privacy outrage, the same sort of thing is going for Android users too. It seems that in order to use one of today's best smartphones, you're just going to have to give a little to big brother.
There is still a little bit of control left, however, as Apple is allowing users of iOS 4 devices to opt-out of targeted iAds.
According to iLounge, Apple notes:
"If you do not want to receive ads with this level of relevance on your mobile device, you can opt out by accessing the following link on your device: http://oo.apple.com. If you opt out, you will continue to receive the same number of mobile ads, but they may be less relevant because they will not be based on your interests. You may still see ads related to the contrent on a web page or in an application or based on other non-personal information. This opt-out applies only to Apple advertising services and does not affect interest-based advertising from other advertising networks."