Consider a business traveler who has a laptop configured to automatically update a remote DNS server with its current IP address. If the FQDN that was being updated by the laptop is known, or can be guessed, then anyone with modest computer skills can issue DNS queries on that name at regular intervals and monitor the current IP address.
As the traveler moves from one location to another, the IP address will change and the public DNS record for the FQDN will reflect this. The person monitoring the domain name will be able to observe the precise network locations used whenever the laptop connects to the Internet, as well as an approximate timestamp for when each event took place. Depending on the resources available to the monitor, most notably whether or not they work for law enforcement, they may be able to map that network location to a geographic location, possibly with a high degree of resolution.
The public DNS system is distributed across thousands of servers on the Internet and is used in a wide range of Internet protocols. Dynamic DNS monitoring uses nothing more than basic DNS queries and as such it offers effectively complete anonymity to the person doing the surveillance. Not only that, the target this is unable to detect that they are being observed in this manner. This represents a new form of surveillance that might be used by law enforcement for legitimate purposes or for unethical reasons by co-workers, competitors, or even stalkers, of the target.
Dynamic DNS is used by a large number of users for various reasons. For many of these, with static residential or business computers, monitoring poses no real privacy risk. But for those who travel with their laptop it could pose a serious risk to their personal privacy and business confidentiality. This risk has not been widely recognized thus far.