Cookies

What are cookies anyway?

Cookies are small TEXT-ONLY files which are stored by one site so that it can read that information again. There is no way to hack a computer using cookies and no other site can read a cookie set by another site.
They can only read the information they send to your computer and it is your computer which writes the information to your drive.
Most cookies set a date you have visited the site so that they can let you know when the site has been updated since your last visit and the only "Personal" information the cookie can store is what you have typed.

From Netscape's own site:
Can cookies read information from a user's hard drive?
No. Cookies can only store data that is provided by the server or generated by an explicit user action.

Can cookies be used to gather sensitive information, such as a user's email address?
Cookies can be used to store any information that the user volunteers. They cannot be used to gather sensitive information such as the fields in a Netscape preference file.

Can malicious sites read cookie information used by another site?
Cookies are designed to be read only by the site that provides them, not by other sites.

So, you see, there is nothing bad about accepting cookies. As a lot of people do not understand the nature of cookies they get worried for no reason.

For more information on cookies, please visit Netscape's Cookie FAQs or Andy's HTTP Cookie Notes or Malcolm's guide to Persistent Cookies (which contains many links about cookies) or even Christopher Barr - The truth about cookies