When does an employer cross the privacy boundary to its employee?

Hi Everyone:

Question: When does an employer cross the privacy boundary to its employee?

I mean an employer is justified to do background checks for all applicants they intend to hire. That is understandable you don't want to hire or work with a person who is coming into your workplace with criminal intent, right. But how much background check is enough? How far back should you go into a person's life to find out what you need to make your decision on this person? And does will the information you uncover during your investigation of this person really tell what type of person they are today?

Don't get me wrong I have nothing to hide. Everything on my resume is what it is. I am passed the criminal, medical and credit history background check in order to have the job I have. Yet I can't help but wonder "When does an employer cross the privacy boundary to its employee?". At what point is an employer asking to know too much about you? Should the fact that I have a FaceBook,
Twitter, and MySpace account and have a couple of FRIENDS (all relatives, of course) in that account be relevant to anything? At what point is your personal life none of your employer's business?

All replies welcome.