Hey Joesmonkey...
Yeah they can be hacked. When you register the thing online it asks for all sorts of information including an email address. Now that said the real purpose of it was if you wanted to know about any product with a UPC you could simply connect on the internet, scan the UPC on your bottle of Pepsi (or whatever) and the cat would return information on the product, take you to the product's website, etc. Now you know how it works think about why it's free... You will get tons of spam - it adds you to a bunch of mailing lists.
That's where the hack comes in - there is a solder joint you can break inside the cat and after that time when you scan product it no longer sends your info through the web.
That is why it's also free - they figure the payback is all the information gathering it does, not just your personal info, your buying habits, curiosities, etc.
I got one free from wired magazine, never used it. A buddy of mine took 2 of them and made red "eyes" for his machine - yet another good use!
Thinlizzie