If you have any decently modern Android phone, everything you do is being recorded by hidden software lurking inside. It even circumvents web encryption and grabs everything—including your passwords and Google queries.
Worse: it's the handset manufacturers and the carriers who—in the name of "making your user experience better"—install this software without any way for you to opt-out. This video, recorded by 25-year-old Android developer Trevor Eckhart, shows how it works. This is bad. Really bad.
Update 1: Nokia claims they don't use Carrier IQ's spyware.
Update 2: Hackers have found Carrier IQ in Apple iPhone, but only works in diagnostic mode—which is off by default—and only logs technical data.