Customs agents already have the power now to search your luggage when you cross borders, thanks to a circuit court ruling, they have the power to inspect the data on your laptops as well. The decision was handed down relating to this case:
Stuart Romm boarded a plane in Las Vegas on February 1, 2004. When he got off the plane in British Columbia, Canada's Border Services Agency stopped Romm for questioning. After learning that Romm had a criminal background, Agent Keith Brown searched his laptop and discovered child porn sites in Romm's Internet history list. Canada then bundled Romm back onto a plane to Seattle, where US Customs agents had a chance to question him further.
We've heard of cases of 1-hour photo stores calling the police when they find people's pictures of their infants, semi-clothed, on vacation. Imagine the misunderstanding it will cause when customs agents find the same thing on your laptops—or possibly digital cameras as well. You may want to think twice about taking that shot of junior in the pool in Cancun.
Can border agents search your laptop? Yes. [Ars Technica via ]