Unless the battery is removed, they can track your location and listen in on whatever the microphone can hear.
Eavesdropping:
FBI taps cell phone mic as eavesdropping tool http://www.news.com/2100-1029_3-61401…
Big Brother Is Listening to Your Cell Phone Calls
http://www.truthnews.us/?p=746
FBI Can Eavesdrop on You Even When Your Cell Phone is Turned Off
http://axiomsun.com/home/video/fbi_ca…
Is the government listening? The expansion of domestic spying after 9/11 raises some thorny constitutional issues http://findarticles.com/p/articles/mi…
Big Brother Was Listening In A Long Time Ago http://www.prisonplanet.com/articles/…
Tracking:
Your location can either be tracked via triangulation between cell towers, or by satellite GPS, depending.
http://www.youtube.com/watch?v=XrrOm5JNelk
Here you can see a demonstration of Google Earth being used for cellphone tracking.
Ignorance Is Futile! 
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[…] to listen to TV’s and so forth to garner better ads for the user’. As US intelligence agencies already monitor subjects via their cell phone microphones, which can only be prevented by removing the phones battery, you can […]
Sprint is now quite blatant with this issue
Reading the comments under this video is really scary…no one is concerned how they came about all this information.
no sh!t! this is scary stuff..
[…] to listen to TV’s and so forth to garner better ads for the user’. As US intelligence agencies already monitor subjects via their cell phone microphones, which can only be prevented by removing the phones battery, you can […]