Hi Ben
I've been looking into this a fair bit myself and have arrived at the following conclusions.
As already mentioned this whole legislation is up in the air to say the least, there is little guidance on how this will be practically implemented. From what i gather, general cookies that enhance usability by remembering information such as preferences etc are ok, however cookies that hold information that is deemed to be personal are more of an issue. Therefore i guess the case you make regarding Google analytics could be an interesting one.
We look after a number of medium weight websites that use cookies, some of which could be deemed to fall foul of this legislation, however so is just about every ecom site on the Internet. I am taking the view that i will see how the big boys tackle this, the likes of Amazon, Ebay, etc and follow their lead. For me this is one occasion not to be ahead of the game, especially as it will interfere with the purchase process and pretty much goes against every UX rule out there.
One other interesting point is that almost every site i have seen cover this story (BBC, Mashable, TechCrunch etc) all use cookies on the pages they are reporting this story on.
I suspect there will be a lot more debate and tweaking of this law before it is actually enforced as it seems impractical to implement as it stands