http://www.flickr.com/photos/49099289@N05/4825905711/lightbox/
In short: we conclude that if you want to protect the instantaneous location and prevent movement from exposing that location, then you have to obscure any location by _twice_ the amount.
For randomization of x metres:
1. You store the current location. This process is repeated only when the original location is more than x metres from this location.
2. You move the location randomly by up to x metres. You expand the uncertainty region to encompass the area that does not trigger the creation of a new location (the area from step 1).
The uncertainty of the resulting location is at least 2x metres.
This can be overkill, particularly for static locations, but it seems to be the best tradeoff between simplicity, usability, and protection.
Credit to Robert Sparks and Warren Kumari for exposing the problem and brainstorming solutions.
--Martin
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