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The Mobility Project
Did you know that virtually every website you visit logs your IP address? This is the unique address that your ISP assigns to your computer each time you go online. This therefore makes it possible for someone to track your internet activity. There are ways around this, including anonymizing software, and anonymizing websites. Note that your ISP will always be able to tell what websites / IP addresses you have visited. There are a number of options available:
Anonymous Proxy Services
Anonymous proxy services allow you to connect to virtually any website as they mask your IP address. They can be useful to bypass a filter on a restrictive network so that you can access blocked sites (eg. webmail). There are many proxy websites available on the internet, but you should always remember that the proxy site will be able to tell what websites you visit and may be able to intercept information (eg. passwords) that you transmit using their site.Using web-based proxy services do not guarantee strong anonymity - they simply mask your actual IP address from the sites you are connecting to. There can also be complications where plugins (eg. Adobe Flash Player) may not use the direct connection via the proxy server and this may unmask your true IP address. Your IP will still be logged by the proxy site itself, so if strong anonymity is required, you should consider other options.
If you want to surf anonymously at home (or on a computer that you are able/allowed to install software on), Tor is a free software package released by the EFF to help you protect your privacy online. You can download the Tor software package from the Electronic Frontier Foundation (EFF) website.
Tor requires a piece of software to run in your system tray. You need to configure your browser to use it as a proxy server (full instructions are on the EFF website) and the software will then take over your internet traffic. This provides more reliable anonymity since all your web traffic is "bounced" between a random number of random Tor nodes (other users) using strong encryption, so it is very difficult to track your movements on the web. Significantly more information on the positives and negatives of the use of Tor is available on Wikipedia and I would strongly recommend that you read this and understand the various issues before you make use of Tor.