Wikipedia has a pretty good synopsis of Phorm, its history and its system. (This is the page that Phorm itself tried to edit to paint them in a better light).
The BT support forum has a thread for BT/Webwise questions. There are never any answers, but it's worth looking at.
Notice the company's history, as 121media they were behind the spyware package PeopleOnPage. More about PeopleOnPage from F-Secure.
The Information Commissioners Office have said that fora system such as "Webwise" to be legal, the system must be opt-in rather than opt-out. On that basis, the current trial is illegal. (On the other hand, reading various forum indicates that no-one knows if the trial has really startd - there are no reports of any (opt-out) invitations to participate. It is of course possible that the announcement of the third trial was only intended to shore up Phorm's flagging share value).
Web-browsing data from people who have opted out of Phorm's DPI profiling will still be passed through the Phorm system.
The much-vaunted anti-Phishing aspect of Phorm/Webwise is a bait to persuade customers to take part - BT do not gurantee efficacy. Despite this BT flag this as the main feature of the system, demoting the real purpose, to profile our browsing habits for targeted advertising revenue, to second place (this is one reason why "opt-out" is inapprpriate).
I received my MAC from BT yesterday, this morning I set the wheels in motion to change ISP.
How the Phorm system works;
