It does, in fact, keep the information out of whois. However, at least with GoDaddy, I was told by a friend (who it happened to) that all someone has to do is send a threatening letter to them and they immediately fold and give up the private info.
I believe that some other registrars require a subpoena or evidence of a legal action, but don't know which are which.
That's kind of what I figured. It keeps the 'normal' people from knowing, but quite frankly, 'normal' people don't even know about whois so I am thinking there is very little point.
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