I like the idea of privacy, but would rather see it implemented as a password protected smart collection which could be locked in, so that what's considered "private" can depend on who's around, or if only me: what mood I'm in...
In other words, something a little more flexible than:
* Private (hidden)
* Not Private (not hidden)
I assume you already know that if you just want to keep yourself from seeing "hidden" photos in the lib grid you can do that now using the lib filter.
PS - What would be especially cool is if we could have private folders too, not just photos.. (so folders currently being considered "private" would also be hidden from view and inaccessible).