We've seen how people surveilling the State can provide a check on the abuse of power. Another example (of a sort) is the leaking of images from Abu Ghraib via cell-phone cameras.
More systematic surveilling of the State could provide a still more effective check. It seems to me that the strongest principled resistance to this (skipping lightly over the inevitably enormous unprincipled resistance) would be in monitoring intelligence gathering (watching the watchers) and military activity. In these areas, however, delayed access could give much of the benefit of public oversight while undercutting arguments for secrecy. We wouldn't be able to see where the army was deploying today or what they were planning, but would eventually be able to review the camera data in detail, perhaps a week later. (There would be complications regarding legitimately sensitive data, but this should never be an excuse for permanent, opaque secrecy.) Moderately delayed access would still provide accountability.
I like the village surveillance model, because it offers a point of reference based on long-term, widespread human experience. It would be illuminating to consider both what village life has been like and what the similarities and differences might be with various patterns of surveillance management. One can imagine pathologies if the village expands to the world (stalkers from beyond the horizon), but these potential pathologies might be addressed and minimised by controls on the diffusion of data. (Maybe there are cameras in the loos, but the records are encrypted and can only be opened by subpoena.)
Culture shock... Yes, and worse if the new culture is intrinsically intolerable. This issue is rushing toward us and seems poised to cause political and social change of transformative scale. I think it's worth trying to understand what outcomes are both possible and acceptable, to help us decide what is worth trying to achieve. Words and ideas I offer here may be used freely and without attribution.
problem: the Gummint can always afford bigger computers than we can.
I think this is a worthwhile topic. one data point might be the gov't office in (Germany I think?) Euroland which was made totally visible -- a "fishbowl" building where the public could look into any office at any time and see their tax dollars at work. The difference between theory and practise in practise ...