CWmike writes "Microsoft has defended the IE8 tool that suggests sites based on URLs typed into its address bar, saying that the browser 'phones home' only a limited amount of information to Microsoft and that the company discards all user IP addresses almost immediately. Company managers also contrasted IE8 Beta 2's 'Suggested Sites' feature with the 'Suggest' feature used by Google Chrome, saying that Microsoft's requires the user's explicit permission before it's used. They did acknowledge a bug that prevents the request from reappearing when users reinstall the browser. Cyra Richardson, a Microsoft principal program manager on the IE team, said: 'Suggested Sites is connected to the browser's history, and it's not looking at each of the keystrokes. IE only captures the URL as it is navigated [to], when that URL goes into your history.' Nor does Suggested Sites log and transmit cookies to Microsoft's servers, as does Google Suggest, Richardson said. 'The data we log is actually pretty innocuous.'"