Google has posted a list of proposed best-practices for Internet software, such as toolbars, which aims at separating spyware from other apps. One of the big problems with the spyware fight is that the legal theories employed (as in the lawsuits against Gator) often have the potential to break the Internet in important ways. For example, the plaintiffs in Gator say that Gator violates their copyright in their webpages by putting new windows onscreen when they're loaded with competitors' info (i.e., you load up www.deliveryservice1.com and a window pops up for deliveryservice2.com). If a court agrees with this theory, it means that the org responsible for the contents of the foremost window in your browser get to control all the other windows on your screen -- that you violate their copyright if you install, say, a price-comparator that loads Amazon's comparable sell-pages when you bring up a bn.com page so that you can check who's cheapest.
Google's principles seem, to me, to be much more thoughtful and respectful of the Internet and its users. They revolve around key notions in consumer protection: clarity, honesty, and easy opt-out. Not committing fraud, IOW.
Applications that affect or change your user experience should make clear they are the reason for those changes. For example, if an application opens a window, that window should identify the application responsible for it. Applications should not intentionally obscure themselves under multiple or confusing names. You should be given means to control the application in a straightforward manner, such as by clicking on visible elements generated by the application. If an application shows you ads, it should clearly mark them as advertising and inform you that they originate from that application. If an application makes a change designed to affect the user experience of other applications (such as setting your home page) then those changes should be made clear to you.Link (Thanks, David!)