- secure multi-party computation to compute eignevectors (Canny).
- add noise to each rating
This paper shows that adding noise may not preserve as much privacy as you' d like. If the noise for each rating is a random draw from the same distribution, and if there is a finite set of possible ratings, then you can make a pretty good backward inference about what the original ratings were. The basic idea is...
The solution in this paper is to have users add a variable amount of noise to their ratings, not the same draw for each item.
I haven't had a chance to read the paper in detail yet, but it seems quite elegant. I hope I'll be able to use it in my recommender systems course this fall, though the math may be too advanced.