The National Security Agency trawling program sometimes assumed to be reading the net for the U.S. Government's spooks. Most hackers used to think it was mythical but believed in acting as though existed just in case. Since the mid-1990s it has gradually become known that the NSA actually does this, quite illegally, through its Echelon program.
The standard countermeasure is to put loaded phrases like ‘KGB’, ‘Uzi’, ‘nuclear materials’, ‘Palestine’, ‘cocaine’, and ‘assassination’ in their sig blocks in a (probably futile) attempt to confuse and overload the creature. The GNU version of EMACS actually has a command that randomly inserts a bunch of insidious anarcho-verbiage into your edited text.
As far back as the 1970s there was a mainstream variant of this myth involving a ‘Trunk Line Monitor’, which supposedly used speech recognition to extract words from telephone trunks. This is much harder than noticing keywords in email, and most of the people who originally propagated it had no idea of then-current technology or the storage, signal-processing, or speech recognition needs of such a project. On the basis of mass-storage costs alone it would have been cheaper to hire 50 high-school students and just let them listen in.
Twenty years and several orders of technological magnitude later, however, there are clear indications that the NSA has actually deployed such filtering (again, very much against U.S. law). In 2000, the FBI wants to get into this act with its ‘Carnivore’ surveillance system.