Proprietary software means, fundamentally, that you don't control what it does; you can't study the source code, or change it. It's not surprising that clever businessmen find ways to use their control to put you at a disadvantage. Microsoft has done this several times: one version of Windows was designed to report to Microsoft all the software on your hard disk; a recent "security" upgrade in Windows Media Player required users to agree to new restrictions. But Microsoft is not alone: the KaZaa music-sharing software is designed so that KaZaa's business partner can rent out the use of your computer to their clients. These malicious features are often secret, but even once you know about them it is hard to remove them, since you don't have the source code.
In the past, these were isolated incidents. "Trusted computing" would make it pervasive. "Treacherous computing" is a more appropriate name, because the plan is designed to make sure your computer will systematically disobey you. In fact, it is designed to stop your computer from functioning as a general-purpose computer. Every operation may require explicit permission.
The technical idea underlying treacherous computing is that the computer includes a digital encryption and signature device, and the keys are kept secret from you. (Microsoft's version of this is called "palladium.") Proprietary programs will use this device to control which other programs you can run, which documents or data you can access, and what programs you can pass them to. These programs will continually download new authorization rules through the Internet, and impose those rules automatically on your work. If you don't allow your computer to obtain the new rules periodically from the Internet, some capabilities will automatically cease to function.
Of course, Hollywood and the record companies plan to use treacherous computing for "DRM" (Digital Restrictions Management), so that downloaded videos and music can be played only on one specified computer. Sharing will be entirely impossible, at least using the authorized files that you would get from those companies. You, the public, ought to have both the freedom and the ability to share these things. (I expect that someone will find a way to produce unencrypted versions, and to upload and share them, so DRM will not entirely succeed, but that is no excuse for the system.)
Making sharing impossible is bad enough, but it gets worse. There are plans to use the same facility for email and documents -- resulting in email that disappears in two weeks, or documents that can only be read on the computers in one company.
Imagine if you get an email from your boss telling you to do something that you think is risky; a month later, when it backfires, you can't use the email to show that the decision was not yours. "Getting it in writing" doesn't protect you when the order is written in disappearing ink.
Imagine if you get an email from your boss stating a policy that is illegal or morally outrageous, such as to shred your company's audit documents, or to allow a dangerous threat to your country to move forward unchecked. Today you can send this to a reporter and expose the activity. With treacherous computing, the reporter won't be able to read the document; her computer will refuse to obey her. Treacherous computing becomes a paradise for corruption.