Windows Error Reporting in Vista is a feature that allows Microsoft to track and address errors relating to the operating system, Windows features, and applications. It gives you the option to send data about errors to Microsoft and to receive information about solutions (should you be lucky enough for one to have been identified). The solution could be anything from a download link for a patch or update to a knowledge base article with instructions for working around a problem. This is for Microsoft product only, so you may or may not feel there is risk in sending such information. The information does present a valuable resource to allowing Microsoft developers to use this in order to address problems in more quickly, which should ultimately improve the quality of Microsoft products.
It offers multiple "consent levels" to help you control how Windows Error Reporting prompts before sending data:
Ask each time a problem occurs = Windows Error Reporting always prompts for consent before sending an error report
Automatically check for solutions = Windows Error Reporting sends only the minimum data required to check for an existing solution (such as, the application name, application version, module name, module version, and exception code). After sending this initial data, Windows Error Reporting prompts for consent to send any additional data that might be requested by Microsoft.
Automatically check for solutions and send additional information if needed = Windows Error Reporting sends the minimum data (as descried above) as well as any data that the developer of the program has designated as being unlikely to contain personally identifiable information. Windows Error Reporting then prompts for consent to send any additional data that might be requested by Microsoft.
Send all data = Any data requested by Microsoft will be sent, without prompts. Note that this setting can only be configured through Group Policy (it is not available as a setting in the Control Panel).
You can access settings for Windows Error Reporting here:
Control Panel > System and Maintenance > Problem Reports and Solutions > Change settings > Advanced settings
From here you can turn the feature on and off. Here, I recommend selecting "Automatically check for solutions" as your system setting. Then, if for some reason you have programs you do not wish to have report, there is a block list you can use to add any executable that should not send problem reports.