At my company in NYC (Intent Media) the founders specifically spent time writing a clause into our standard employment agreement granting everyone the rights to their side projects.
I'm not sure how common this is, but it seems like something that everyone should look at before signing on with a company, especially with the battle for talent that's going on right now.
It's a show of good faith but they would have no claim to your side projects anyway (unless you produced a direct competing product that they could reasonably demonstrate you had stolen from them).
At least that's my view of it. If anyone has an example of some programmer having his side project legally taken (i.e. a judge made him hand it over. Getting intimidated into handing it over outside of court doesn't count) by a company I'd love to see it.
It's easy to brush off intimidation when you forget that fighting it often involves a huge investment in legal fees that few individuals have the resources to spend in a battle with a large corporation. Especially when the law probably isn't on your side and you signed a contract giving away your IP anyway.
How about analyzing the situation for what it is: failing to protect independent innovation may result in less independent innovation. All the legal speculation and contract theorizing in the world will do no good if the facts of the matter tell a different story.
My point about intimidation was that if it is used then it still isn't proven that the case would hold water. You can't sign yourself into literal slavery, you can only be tricked into giving up rights that you have.
I'm not sure how common this is, but it seems like something that everyone should look at before signing on with a company, especially with the battle for talent that's going on right now.