I believe that privacy is a right we can all enjoy. I admit that I do have my limits, though. I don't mind if employees use company computers for occasional personal use (such as emails, etc.) but I definitely draw the line at the use of company computers for employees to run their own businesses, view adult content, or waste a lot of time.
Now, I am very fortunate that it's not been a problem so far in my business but I've heard of it being a problem in other businesses so I looked around at what kind of software was out there for businesses to use.
One of the best I've seen is www.pcpandora.com, which records websites, emails, and keystrokes, as well as lists all the programs that run on a computer. It even takes screenshots of all emails.
And, if your HR department needs “hard evidence” before they can fire an employee, it will print out a report.
For about $70 for the pro version, it looks like a good value for the business wanting to keep an eye on employees.