I just received an e-mail from the metadata product specialist. Its
not really a solution but they do know about it. On the ESRI support page
there is a VB script that one could use to strip some of the info out.
But nothing already incorporated in the metadata editor.

They said:

If the user is talking about geoprocessing lineage created when data is
imported, merged, intersected, reprojected etc e.g. into a geodatabase,
this can't be modified manually using any editor. It must be modified

At 9.2 we will hopefully have a solution that will allow sensitive
information to remain in a local copy of the metadata where it is
useful, and a publishing mechanism that will let people strip out
information they feel is sensitive and should not be publicly available
through a metadata service.