I agree with grellas that while Digg or Reddit (really their legal counsel) could technically claim a copyright in the legal written work that you are adapting for your own use, realistically suing you for copyright infringement on their terms of use and privacy policies wouldn't be worth their time, and you could potentially assert a successful defense of fair use. I don't know the specifics of your business so I can't give you specifically tailored indemnity, privacy and use of information clauses for free (yet!) but that type of work is not hard for a lawyer, really shouldn't cost you very much and shouldn't take long (a couple hours). The much bigger issue in my opinion (and why copying Digg, etc long term isn't a good idea) is whether adapting their policies will adequately protect your rights and liabilities and those of your business well, especially those idiosyncratic to your business. If you just need boilerplate for the time being you can avoid this whole issue by using privacy policy and terms of use generators; I found a few here:
Hello HN, thank you for all the great comments! My name is Munish Dayal, I'm a newly admitted attorney in California and we started this site not long ago because we thought that most of the Legal Q&A sites weren't that great (a lot of them charge money). I briefly worked as a corporate lawyer at a firm in California that charges obscene rates but I wanted to say that I am personally going to try to make an effort to answer every question on the site that I can, especially for entrepreneurs bootstrapping their own startups that may not have resources to seek counsel, no matter how small. My passion is working with startups since I'm attempting to start my own so I am happy to at least try to answer any of your questions. I can't guarantee that it will always be a definitive answer but I hope it will at least help you.
I wanted to address a few concerns - I am building up a stable of attorneys, new and experienced to answer questions so the people answering your questions on our site aren't just a bunch of clueless law students. I know our design isn't that great (I'm not much of a designer) but we are going to work on it. George Grellas - you are right to point out that the quality will be variable and this will never replace a talented, experienced attorney (like yourself) that is necessary for startups seeking capital; I can't guarantee I will know something about every question, but we are shooting for it as a resource. I will keep checking this thread but thank you all for the support and I hope you will find this useful.
http://www.bennadel.com/coldfusion/privacy-policy-generator....
http://terms-of-service-generator.legalriver.com/