Three ways of anonymous surfing

As a result of recent events in Europe I began to think about the anonymity on the web and while using its services. I started to meditate on how to hide IP address nowadays and what is the best way to be anonymous in the Net on the whole.

In Germany they're considering a law that can be passed in the nearest future. Among other aspects the law states that from now on the Internet providers MUST give away their clients' data to investigating agencies.
E.g. in case the law is passed in 2008 all the information about Internet surfing, searches and crossings and even the whole google.de users' correspondence will be among the data exposed to the authorities by the Dutch Google department.

Perhaps Europe will follow Germany and our security along with the anonymity will be doubtful. On the one hand I agree that cheaters, thieves and other criminals are to be punished, but we do not want to put person's privacy undecided. How to talk to your lover? How to evade your boss? How to write letters via email and messengers if you know somebody's reading them?
I might be exaggerating but we have different interests and everyone uses the Internet on his own and each of us has what to hide from other people/colleagues/friends/wives/husbands/bosses etc.

Will that ever happen that we won't be able to do anything but become the users of the 'closed' Internet like in CPR? For the past years China has been leading in the list of the nations practicing wide political Internet censorship. Cyber police team tracks and blocks resources not comfortable to the authorities within the framework of a special government program - Great Firewall of China. And last week companies Yahoo China, MSN China and some others signed the Code assigned for their blog services which oblige the companies 'to protect CPR and public interests' and to remove 'unordered and immoral messages' from online journals.

Tell me what you think about it and your opinion regarding the fact that you will be watched.

Is it forbidden to visit the sites not connected with your work while you are in the office? Is it OK to talk via messengers?

So let's put everything to its place - what ways to stay anonymous on the net are available for us here (we won't consider different variants using vpn/ssh tunnels, let's take into account the mass usage. In this case the variants with exhausting tuning are thrown away)

I offer just 3 ways how to hide IP address:

Software using proxy servers. I mean all traffic passes through a proxy.
Software using ssh tunnel. It is a socks server to the remote server with an encoded channel. It can be used for http/mail/icq.
Software with an encoded tunnel client < - > server with tcp/udp packages transmission. Based on this any program - http/mail/messenger/p2p/games/dns/etc - can run.

1. This software is often called hide IP/change IP/anonymous surfing. I will show you how it works. Surfing through a proxy server is anonymous for the remote server only.

E.g. Go to google.com and you will see that it traces down your proxy server IP. On the one hand the program is performing its function - hiding IP address. But on the other - your admin/provider/boss can review all enquiries made with the help of the software and the pages you visit. Moreover we cannot send a letter or write a message anonymously since we know that we are under Big Brother supervision. It turns out that such programs are suitable in case you want to play a joke on your friends or you've been banned from a forum. This software doesn't correspond to the requirement of anonymous surfing.

2. I haven't seen a whole lot of simple and understandable services using ssh tunnel. This method enlarges the range of programs which can hide IP address and even encodes all sent and received data.

E.g. If you enter myspace.com or digg.com using ssh tunnel your boss/admin/provider won't be able to see it and read your messages. But there is a hitch - using ssh tunnel DNS enquiries are sent without being encoded because it doesn't support udp protocol. The anonymity will be at risk as the domain you enter or domain you send an email to are visible. Nobody will guess what you were doing at the site but they will know you were there. This software doesn't correspond to the requirement of anonymous surfing either.

3. Software that runs its own VPN, you pay for a separate server, its tuning and administration. It's enough to press "Make me invisible" and all questions drop away.

The advantages of this software are obvious in comparison with the others. The application runs through the tunnel, tcp/udp support. Any p2p, games WOW3, icq application support. No need to customize browsers and programs - one button click and that's it. It's name is SmartHide.