Alright, let's start with the obvious. No, nobody watches you back through your TV, no matter what conspiracy theorists say. Well, the CIA is planning to, but that's not the point. The point is that Verizon has plans for a DVR that will pack both a camera and a microphone to allow for better targeted advertisements.
It works like this. The DVR is able to listen and watch and guess what's going on in the room and show you commercials based on that. Barking? Dog food ads. Fighting? Marriage counseling. Makin out? Condom ads. According to Ars Technica, Verizon isn't the first to jump on this idea – Google and Comcast both have similar technologies. At this point, no one has actually put them into a device though.