Little by little more information trickles out about this case, I think it is far more serious than it looks on the outside right now.

Given the fact that there apparently was surveillance of students without proper cause it immediately becomes a legitimate question how far reaching that surveilance was.

You have to do a lot of 'watching' in order to catch someone doing something that looks suspicious in the first place (no matter they got it wrong), and then to go public with the fact that (1) you've been doing this and (b) you underestimate the ability of the world to extrapolate to whatever else you might have been up to is pretty dumb.

Then there is the question of any screen captures / voice recordings, listening in on employees without cautioning them is already a punishable offense, listening in on minors in a structural way and looking at them without going through the proper authorities is a completely different kettle of fish.

And if hardcopies or files were passed around with screenshots and / or recordings those responsible will end up in jail for a long long time, in that case you could argue that this was actually a child porn ring that got their raw materials by subverting the PCs of children in their care.

More links today on this case (which I've been following pretty closely, given my interests in anything that has to do with webcams):

http://education.zdnet.com/?p=3655

http://www.philly.com/philly/news/homepage/84877027.html

One immediate question that needs answering is if this laptop was not reported stolen and that supposedly is the condition to be met before activating this system then what was the reason this student was under surveillance in the privacy of his own bedroom.

It's a typical case of 'who watches the watchers', if there are no real safeguards on enabling this feature then you can almost be sure that it will be hacked. And depending on the security of the implementation it is very possible that there are ways to enable the feature completely bypassing the schools' central safeguards (assuming those are in place).

I'm hoping for some hacker student on that school to dive in and document what exactly is going on on those computers, for instance, why there is no visible indicator that the camera is active.