elfs | Is Barnes & Noble violating my privacy or my copyright?

So, I'm in the middle of writing a supposed action/adventure SF lesbian romance mash-up thing with a couple of fairly good love scenes and one really nice "coming out" scene that makes me happy. Since I have real trouble with typos, I side-loaded the current WIP onto my Nooks (yes, I own two of them, a pocket-sized one for my phone and a full-sized Nook Color) and started noting down different things about the story. It's got a great beginning, a muddle, and a terrible ending. I had an idea about the ending, but it'll take some work. I was using the Nook Color last night. This morning, I had an errand to run and while waiting in line pulled out my phone to contine. What it gave me was this: "You are on page 1, but on your other Nook you were last on page 39. Do you want to go to page 39? Yes/No."

I felt genuinely creeped out that this information was rolling around the Internet like that. If I'd owned the mechanism of synchronization, I'd probably be comfortable with it, but I don't: Barnes & Noble does. Now, B&N has generally been pretty good, but given that 95% of the books I have on my Nook are side-loaded stuff that are either ripped copies of MS-LIT books (legitimately purchased, but still, I had to crack them to get them onto my Palm, and now my Nook), Calibre-encoded stuff downloaded from my old hangouts at alt.sex.stories and the like, or grey-market yuri manga, I feel a little uncomfortable with anyone tracking what I read like that.

More to the point, does this mean that a pre-release copy of Honest Impulses is rolling around on a Barnes & Noble server? Are they illegitimately copying and tracking everything I've got on my Nook, not just the downloaded stuff but the sideloaded stuff as well?

I asked a B&N representative about that and he assured me, no, they don't. When I asked what information the Nook does send to B&N about my reading habits, he couldn't tell me. Which makes me wonder even more.