The first is something that has plagued consumers for decades but is now getting out of hand. Let's say that you purchase something from a traditional mail order catalog. The catalog company has your name, address and phone number from your order, and it also knows what items you have purchased. It can sell your information to others who might want to sell similar products to you. That is the fuel that makes telemarketing and junk mail possible.
On a Web site, the site can track not only your purchases, but also the pages that you read, the ads that you click on, etc. If you then purchase something and enter your name and address, the site potentially knows much more about you than a traditional mail order company does. This makes targeting much more precise, and that makes a lot of people uncomfortable.
The second is new. There are certain infrastructure providers that can actually create cookies that are visible on multiple sites. DoubleClick is the most famous example of this. Many companies use DoubleClick to serve ad banners on their sites. DoubleClick can place small (1x1 pixels) GIF files on the site that allow DoubleClick to load cookies on your machine. DoubleClick can then track your movements across multiple sites. It can potentially see the search strings that you type into search engines (due more to the way some search engines implement their systems, not because anything sinister is intended). Because it can gather so much information about you from multiple sites, DoubleClick can form very rich profiles. These are still anonymous, but they are rich.
DoubleClick then went one step further. By acquiring a company, DoubleClick threatened to link these rich anonymous profiles back to name and address information -- it threatened to personalize them, and then sell the data. That began to look very much like spying to most people, and that is what caused the uproar.