Thanks everyone for your responses. I won't respond any more to views of Android use as I'm not here to start a flame war or a political discussion.
My own view is this: Android is open source and offers the most choice, but I'm unhappy with the integration with Google and its servers. I don't like the shift to cloud services that is happening now.
I want my data available locally as much as it is possible and if it has to be uploaded, the data has to be encrypted. I am willing to give up easy anywhere access to my data.
A corporation's promise that they'll anonymize my data or that they won't share it has no weight with me. Therefore, any entity that is not me or completely trusted by me can expect only the minimum of data from me to allow for some significant return to me. This is a privacy best practice for me.
Please note that I do not intend to offend anyone. I also want to apologize for anything I've said out of ignorance. I'm not hugely paranoid (I think!) but this issue is important to me. iOS, Windows phone and Blackberry are all closed and offer even less configurability, so I don't want to run those.
So, to get to the point, could someone please tell me of the things they've done to minimize data leakage on their phone and other such measures to improve their privacy on Android?
Answering these questions will help me and get me out of your hair.
a. What is the most privacy conscious custom ROM in Android land?
b. How can I get granular control over what apps are installed and what they're phoning home?
c. What are some less invasive apps to replace Google's apps?
d. How can I improve security on Android? Please suggest good firewalls, malware scanners etc.
e. Can you recommend some good security and privacy best practices for Android? Perhaps your organization implements some?
f. Add anything else that you think is relevant.