Use alt-tab to switch back and forth between programs quickly.
The alt-tab shortcut in Windows and command-tab shortcut in OS X lets you switch between whatever programs you're using very quickly and seamlessly. Use it to bury your dirty stuff.
Use a smaller screen, like an iPhone.
The more discreet you can be, the better. Why not keep your business on a smaller screen that's easier to hide?
Get a monitor cover that blocks the view.
A privacy screen is designed so that people walking by or looking at your screen at an angle will be unable to see anything. Only if you are sitting directly in front of it is your view unaffected.
Use mirrors!
Arrange some mirrors in your office strategically to keep an eye on where passersby are. Get a rear view mirror for your monitor like this one from ThinkGeek.
Get a boss button.
A boss button is a cool foot-activated switch attached to your computer -- when you trigger it, it hides whatever you're doing and brings up a business-looking screen.
We like the StealthSwitch.
Get more desktops on one screen!
Use VirtuaWin for Windows and Spaces for OS X. Put all your work in one desktop and put all your leisure materials in another. You can switch back and forth with a keystroke or mouse gesture.
Use a remote desktop utility to watch porn on your home computer without leaving the office.
You can remotely access your home computer with proper software. That way all your seedy browsing history never gets saved to your work computer. For OS X, we like Chicken of the VNC. For Windows, we like Tight VNC.
Use private browsing.
Many browsers nowadays offer some sort of private browsing option that won't record your web history. See if your preferred browser has one.
If you use Firefox, you can turn on private browsing under the "tools" menu. In Chrome, you just need to open a "New incognito window."
Empty your cache when you're done.
You don't want all that stuff to accumulate. Take out your digital trash, and do it often.
To do this in Firefox, select "clear recent history" from the "tools" menu.