Privatedns.com is a service provided by the iWeb Technologies Inc.

On 3/7/2008 they had a page at http://iweb8.com/web-hosting/technologies/anonymous-dns/
which said:

That page is now gone, but they do have "Anonymous DNS Servers" listed as a feature they offer their customers. It has an infopopup which reads:

"iWeb offers private DNS server names that do not identify your site as being hosted by iWeb but rather hosted by a private dns service. It is useful for resellers or if you do not want a whois request to reveal you are hosted at iWeb."

Maybe there is a benefit to the reseller, but there's also a need for a certain level of accountability on the internet. Privatedns.com has an Abuse.net listing:

$ whois -h whois.abuse.net privatedns.com
abuse@iweb.com (for privatedns.com)
abuse@peer1.net (for privatedns.com)
postmaster@privatedns.com (for privatedns.com)
abuse@privatedns.com (for privatedns.com)
abuse@noc.privatedns.com (for privatedns.com)

There are other references to "privatedns.com" in their blogs.(archived).

And there's this forum post: AOL and other companies reject mail from privatedns