We've seen this idea a few times before, notably the Herman Miller Sound Management System, an audio masking system which affords private conversations via noise masking. The Yamaha VSP-1 works much like those ambient sound devices before you fall asleep, except in this case, the audio output has been engineered to mask conversations. Not necessarily much use in a household (hmm, maybe a bathroom edition?)
According to Oh Gizmo, Yamaha reported the VSP-1 capable of making 89% of conversations incomprehensible for eavesdropping on average, with it dropping down to 48% at worst. Seems like a useful device for those of us who work in wide open office areas where Snooping Stevens and Noisy Nellies can get up all in your business uninvited with a leaning ear towards your conversations. But at around $1,200, this is going be a specialty item at best for larger corporations.
Other privacy solutions: