If you were spooked by the news that Path 2 - a popular social networking app uploaded your entire address book to their servers without your knowledge then you should download this new jailbreak tweak called ContactPrivacy by Ryan Petrich.
Ryan Petrich says the Path incident inspired him to create a jailbreak tweak, which prompts you when apps like Path 2 try to access your contacts database and gives you an option to allow or deny access to the iPhone app.
Petrich has mentioned that not all apps recover successfully when their access to the contacts database is revoked.
ContactPrivacy is available for free. To install it, you need to add Ryan Petrich’s repo to Cydia using the following URL: http://rpetri.ch/repo
It great to see the jailbreak community respond to Path's privacy issue and give control of the Contacts database back to the users.
Hat tip to iDB
Update:
Please note that this tweak causes Whatsapp to crash, so if you're a Whatsapp user then you may want to hold off until the issue is fixes. Thanks everyone for pointing it out.

thanks ryan u came up with that quick and is a major help to protecting our privacy
Ryan is the man! I think all my jailbreak apps besides SBSettings are from him!
Thank you for this……now i will always know when they try to access it. Thank you again for your hard work.
But there is a problem
some Apps like WhatsApp is crashing , why ????
Confirmed – Whatsapp always crashes when allowing it to access contacts. Surely there will be bugs to iron out, so hope updates are released quickly.
that’s a real major achievement . very nice tweak for privacy
articles.economictimes.indiatimes.com/2011-04-21/news/29459336_1_iphone-apple-location-data
How cool is that, really.
that’s the nice thing on Android is the sandbox system for programs and anything you acquire it tells you exactly what permissions you’re giving a specific program
stupid tweaks.. my whatsapps crash everytime i allow it..
pls add functionality like “exception” for authorised apps