Some of the mix-up regarding exactly what is happening with VAC goes back to VAC allegedly sending a MD5 hashed list of visited domain data back to its servers. Some people see nothing in the code to indicate any domain browsing history is being sent back to VAC servers, while others point out that Valve using MD5 was lazy and cracking MD5 hash is child's play thanks to rainbow tables.
Haters are gonna hate, but it's not clear if any of these anti-cheat "spying" allegations are accurate. At this time, Valve has not commented on the accusations. It is not known if the allegations are even true and if so, how long this info on domains visited by gamers are stored. DNS cache is not stored permanently on PCs, but whether or not the allegations of VAC "spying" are legit, some people are recommending that gamers should flush DNS to protect themselves. Ironically, I'll link you to EA's version of how-to flush and renew DNS as well as "what's my DNS."
If you want to read Valve-related news that is definitely true, then Valve recently implemented a beta trial of Steam Tags, a "feature that lets the Steam userbase collectively assign new tags to games." Hell supposedly broke loose as Valve miscalculated the number of trolls who jumped on this opportunity; therefore tags like "crap" "not a game" and other ruder and more abusive labels were among "popular" tags. Therefore Valve had to roll out a beta update for reporting offensive tags.
What do you think? Is Valve invading your privacy with VAC DNS cache checking?
Source: Network World
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