The longer VM dither on Phorm the worse their PR will get and if the announce they will roll it out it will get a hell of a lot worse. While I am certain Phorms product is illegal all the many ways Nicholas Bohm's recent letter to the home office suggests
http://www.fipr.org/080423holetter.pdf there are other reasons people don't want Phorm.
One is mistrust. Mistrust in an organisation whose roots (and kits) lies in adware products involving 121 Media otherwise now known as Phorm. For years ISP's have been plagued by customers complaining about broadband problems which turn out to be not the fault of their ISP but the customer themselves having spyware, Trojans and the like. Customers then find out that the organisation behind this webwise proposed interception and profiling is a company that was possibly the reason behind a percentage of these help calls to the ISP's. It seems beyond belief that an ISP would not distance themselves from a company with this history for obvious reasons. Where is your self respect? I could go on...
Secondly, in my opinion Phorm have not been up front in some of their actions. It seems to me that they had a huge PR machine in place to regurgitate advertised blurb to people who had legitimate concerns. They seem not to directly answer questions which could put to bed certain worries and they have a politicians stance when answering difficult questions and don't answer the question (Questions are only difficult when they don't have an answer or the answer is not what they wish to say).
Thirdly, Phorm have had a long time to think about this product and we the general public have only had about ten weeks to scrape what knowledge we have so far. As new ideas are realised about the affects of Phorm directly and indirectly it becomes more and more worrying in its implications. I feel it would be wise for ISP's to ask Phorm, where is that UK legal advice Phorm claims it has (no longer the Home Office) and do what good academics should do when learning. Debate, look at all legal arguments and also consider the affect on the direct paying consumer of your services - your billing customers. You may have 95% of your customers of Day 1 VM Phorm, but you will probably lose many more over time as the Phorm business model is educated to your paying customers and they react. Customers will not trust or forgive you if you try to put this in under the horizon and they will never trust you if they are not happy when they discover the technical shenanigans that go on to make this work.