This post about grad school in history has been making the rounds. It basically says the same thing most of us have been saying: there are no academic jobs, current academic lottery winners won't tell you the truth, the opportunity costs are too high, etc. Still, it's a nice re-statement of the problem.
Although I believe everything stated in this blog post, I'll admit I find it hard to quash the dewy-eyed dreamers that come to my office, seeking advice about graduate school. It's hard to tell them "no", without it coming out as either "you're not good enough" (no matter how often I say that's not the case), or "it's only anthropology that's this f#@ked up" (especially since students who are given a pessimistic view of the future by me often find a more optimistic faculty member in another field, and assume that they're better off in history or sociology).
How much reality do you inflict on undergrads?