Hey . .i want to use Bitstamp to buy sell bitcoins. But it requires my personal identification, the images adderess proof and all. Is it ok to give it my personal id's. Or they will use my id in some illegal stuffs. What should i do? Also, is bitstamp, a legal? Not SCAM? For it give bitcoins at considerably lower than marketprice. 
Expect that for reputable bitcoin exchange. Somehow they need customers information and real idendity so that they can take care of it in case of a fraud. In that way, it will minimize the works of finding the links to illegal money activities that will happen in the exchange. Also it's mandatory since they are a registered company.
Now that they are world's second largest exchange by volume, they need to be strict in their policy.