Interesting online interview between Luke Wroblewski and Steve Portigal on the pragmatics of conducting ethnography for online product research. Specifically - does observing someone using a web site in their normal environment provide advantages over conducting research in a lab?
"there are lots of “hidden” subtleties within digital social systems that govern how people behave. There are contexts of when and where that alter behavior. As an example, during a home visit a buyer on eBay may tell you: “I leave positive feedback when I get an item in good condition.” Their actual behavior, however, differs."
This is a two part interview.
Part 1 - http://www.lukew.com/ff/entry.asp?368
Part 2 - http://www.portigal.com/blog/design-research-a-conversation-with-steve-portigal-pt-2