I've often heard this repeated, but is it actually true?
As much as anything in law, yes. That is to say that it is the general case, but you still get the chance to argue about it in front of a judge* if following the general rule has somehow bothered someone enough to make a harmony-threatening societal problem. Let's break down your example by each fact.
Suppose I'm in a public space...
Then you have no general expectation of privacy, but let's go on.
If someone walks up we stop talking.
Ah, but now you've provided an indication that you want privacy. Now we have a conflict of general rules.
Does this mean that someone ... with a parabolic mic can eavesdrop on my conversations...
Sure, because you're in a public place.
...(from the government) ... without a warrant?
No, because you've shown that you do not consent to their search... ...maybe.
It really depends on local precedent and established case law. Pretty much, if this ever comes up in a court, it would be a good opportunity to argue at length in front of the judge. On the one hand, you were in public, and you should be aware that any kid with a $50 toy microphone or $5 radio bug could listen to your conversation. On the other hand, the government is held to stricter rules (namely the Fourth Amendment) than a kid with a large allowance. If you're stopping for everybody, then you can argue that you aren't intending to obstruct justice or hide evidence of a crime (which might be useful justifications to sway the judge). On the other hand, you didn't check the park bench for bugs before talking, so maybe you didn't really care about more organized eavesdropping.
The argument is that it's only what a policeman would hear if he walked up and listened, but in that case we would stop talking.
No, the argument is whether it is reasonable to expect that your conversation would remain private. That depends a lot on the extent to which you tried to hide your conversation, and the opinions of judges in the area. Different public places have different standards for privacy.
I have every expectation of privacy if I take steps to ensure that privacy
You can expect a pony, too, but the justice system doesn't need to recognize that expectation. Rather, the key word often omitted (including in my earlier post) is that you may have a reasonable expectation of privacy... and again, that depends heavily on the local definition of "reasonable".
Does this mean that the police can video-tape the sidewalk from the window of any office building without a warrant?
In many cases, yes, and they do.
I also note that there's no expectation of privacy *in your home* if you don't have the drapes closed. The implication is that we don't have an expectation of privacy *anywhere*, except in our homes and only if we're concealed.
That is correct. If you don't care enough about your privacy to close the drapes, then why should the court care enough to punish someone who looked in? Now, if your house was very far from the nearest public area, such that it would be unreasonable to worry about someone seeing clearly through that window, then there's room to argue that, as well.
Does that sound like a free country?
Yes. It sounds like a country where I am free to walk in a park without worrying about violating someone's privacy because I have good hearing, and where I am free to bring birdwatching equipment out to where birds are. I am free to look at my neighborhood houses, and I am free to leave my drapes in whatever state I wish. The price of that freedom is only that I must recognize others' freedoms as well, including their freedom to communicate privately.
In any event, we shouldn't be mindlessly repeating that meme as if it's the "law of the land".
It is usually the law of the land, though. Other laws (like the Fourth Amendment) may supersede it, but yet again that's an issue for the courts.
Instead, we should be mindlessly repeating things things that sway public perception in a better direction.
A very good idea. I tend to like "You do not have a moral or legal right to do absolutely anything you want."
It's fairly short, and sums up the entirety of the legal system and most moralities as well. In this context, having an absolutely private conversation in a public place counts as "absolutely anything", and you don't have a right to that. Always being able to eavesdrop on someone else's conversation also counts, and I don't have a right to that, either. With a bit less extremism, however, we can all get along.
* This whole post assumes a judicial process similar to what the United States has, and specific examples are also based on an American perspective.
