First up, you can change your ISP if they sign up for the service - but that is a hassle, really
Hopefully, Phorm will offer an 'opt out' option - which will doubtlessly be VERY well hidden in their website somewhere - and you can opt out. (The bit that confuses me about the opt out is that, as most of us have dynamic IP addresses that change regularly, then the only way to opt out is by doing it as an individual. But Phorm say they do not identify individuals

Makes me wonder how it would work, then!)
Another thing you can do is set your web browser to not accept cookies. You can do this from your browser's settings, but it makes a lot of the other surfing you do a right royal pain in the arse! Some websites will not allow you access to their services if you do not accept cookies - online banking, for instance. Other sites will allow you access but will not know who you are, so will not apply any preferences you may have saved for that site.
Lastly, you can accept that your privacy is compromised, say sod it and not be too paranoid about it!
For my part, if Virgin, (my ISP), goes ahead with the 'service', I shall repay the favour by stripping all adverts out of all web pages I visit! (Web browser = Firefox with the add-on 'ADDBlock Plus' installed). So Phorm can merrily stick stuff in and my browser will happily strip it all out again - sorted
The problem with this approach, of course, is that a lot of the sites I visit are helped out financially by the adverts they host. The occasional click-though helps the site and doesn't do me any harm. This 'valid' revenue would be lost if I came over all stroppy and stripped out their ads. It's this subjective difference, between 'valid' and 'invalid' revenue which a lot of people object to. We shall see, but at the moment the storm is filling up the tea-cup quite nicely. I think the best we can hope for is that the ISP's decide to not risk alienating their customers, and driving them away to their competitors, and don't implement the 'service'.