Privacy-over-IP does not exist
Did not exist. Will never exist. There was quite a lot of buzz about privacy with that new IPv6 thingy. Some say it is bad, as you will have a static address. Some say the privacy extensions will fix everything. I say: lemme rant ;) First of all, that was the internet, when I started using it back in 1999:
[© New Yorker Magazine, March 1993] On the Internet nobody knows that you are a dog'
And that's the internet today:[© robcottingham.ca] How the hell does Facebook know I'm a dog?
Well, I'd say that's not correct. Even in 1999 facebook could know you are a dog (if you ignore the fact, that there was no facebook in 1999), it's just noone really cared about it. But let's start from the beginning :)
An IP-address is a 32-bit integer
An IP-address is technically a 32-bit integer, formatted into 4 8-bit parts (you can read more about IPv4 at Wikipedia), which makes a total of 4,294,967,296 possible IP-addresses. Your ISP has a range in this "address-space" it can give to its customers (you). My ISP (Unitymedia) "owns" about 300,000 IP-addresses (based on the RIPE database), which is about 0.007% of the whole address-space. If you look at the RIPE page, you see two common netname prefixes (DE-KNRW and DE-IESY-HFC) which match two regions of Germany where my ISP has its customers (Unitymedia is a merge of ish and iesy). What does that mean? It means one can map a Unitymedia customer into one of these regions, even if he would change his IP-address (Unitymedia uses DHCP with high lease-times, so this does not happen actually). It does not map the customer to a dog yet, but I bet real GeoIP databases can map them correctly to a city (I didn't try much, but this site suggests it works: http://www.ip-adress.com/?lc=en - at least they map me correctly to Duesseldorf).
Dynamic IP-addresses do not improve privacy
Given the above facts, even if Unitymedia would give me a new IP-address every X hours (many DSL-providers have X=24), it is still possible to map me into a set of about 150,000 "users" (here user means customer, there still may be multiple computers connected via the same line). I would even go further and say the set is much smaller, as I think I am not able to get every "free" IP-address from DE-KNRW-*, as these should be bound to cities/regions (GeoIP databases exist, you rememember?) and I do not move with my line.
Routers and reverse DNS kill privacy
Currently, "my" IP-address is 62.143.232.104, which has a reverse DNS entry ip-62-143-232-104.unitymediagroup.de and does not say anything about me or my location, besides of the obvious "Unitymedia customer". But look at the traceroute:
4 7111A-MX960-01-ae5.frankfurt.unity-media.net (80.81.192.181) 5 13NOC-MX960-01-ae8.kerpen.unity-media.net (80.69.107.26) 6 1411G-MX960-01-ae9.neuss.unity-media.net (80.69.107.2) 7 1411J-MX960-01-ae1.bilk.unity-media.net (80.69.107.70) 8 PH-1411J-uBR10k-06-Te-1-2-0.bilk.unity-media.net (80.69.102.106)Frankfurt is about 250km from here, Kerpen about 60, Neuss about 10 and Bilk is a part of the city I live in, about 4km away from my home. I guess you get the idea :)