The best overview of RealID yet: Why it's a mess:

Anita Ramasastry, a FindLaw columnist, has a fine overview of the problems with RealId at CNN's website: "Why the 'Real ID' Act is a real mess". Correction: the article probably appeared here on Findlaw first. She notes that "Hearings might have revealed that Real ID is going to create many headaches and nightmares for U.S. citizens, lawful permanent residents and state governments, which already labor under an unfunded mandate." Please read the entire article for her insights and suggestions. Some more quotes from this fine article:

More than 600 organizations have expressed concern over the Real ID Act. Organizations such as the American Association of Motor Vehicle Administrators, the American Library Association the Association for Computing Machinery, the National Council of State Legislatures, the American Immigration Lawyers Association and the National Governors Association are among them.

Addresses cannot be P.O. boxes. That will predictably cause problems for people who may fear for their personal safety -- including judges, police officers or domestic violence victims ...

States will be responsible for verifying these documents. That means that, when it comes to birth certificates and other documents, they probably will have to make numerous, onerous confirming calls to state and municipal officials or companies to verify the documents authenticity since it's easy to fake paperwork. In addition, they will have to cross-check Social Security numbers, birthdates,and more against federal databases.

Even with current, unlinked databases, thieves increasingly have turned their attention to DMVs. Once databases are linked, access to the all-state database may turn out to be a bonanza for identity thieves.

It's that "machine-readable technology" requirement, along with the possibility of Homeland Security add-ons, that raises the most serious risk that the Real ID Act will cause privacy violations. (The fact that the technology must be "common" also raises the already-high risk of identity theft.)