I have agreed the new TOS and read through the changes(from DP forum). But, what does this mean? You need privacy policy on the site with says cookies are used to get some info.
There are a lot of other posts here on the subject, so you should probably read-up on those. I also just made a blog post about how i updated my privacy policy, and offer to allow you to copy & and paste or get ideas from it..
Tearabite is right, there are few posts on this already. please search or browse thru previous posts on this
Other DP members have made some very nice example ones you can use in this topic: http://forums.digitalpoint.com/showthread.php?t=730593