[citation][nom]maddad[/nom]If you don't install a program because it needs complete access to your phone, then you might as well avoid 95% of all Androd apps or games. (And I do for that reason by the way). I find it absolutely amazing all the permissions Android programs require. I bought my Android phone base on all the great things people were saying about Android vs IOS. I can't use hardly anything in the Android Market other than music or books because of all the permissions.[/citation]
Sounds weird, but most of these permissions are legit. Example: why does an app need permissions to read your phone state? Because otherwise, it would not know when to drop in the background when your phone rings. You would miss a call because of that. The same goes for iOS, don't believe for a second that just because iOS doesn't always tell you what app needs what permission, apps don't actually get those permissions behind your back.
Bottom line is: as long as you get your apps from a legitimate source (and the beauty of Android is that there is more than one legitimate source out there) your risk is close to zero. The only few instances that bad apps make their way to one of these legit stores they're quickly dealt with.
If you leave the "install apps from unknown sources" unticked, you pretty much restrict yourself to only one legit source: Google Play. That way you can be sure there is no malicious app on there. I have used Amazon's AppStore and G-Play with no issues whatsoever for a long time.