We use the bucket with seat and top arrangement. Works great, but then again it is still legal to dump over the side in Canada, in tidal waters off shore. We carry the porta-potti as well, keeps us legal in US waters when a holding tank is required. We have only used it once in 4 years.
As for privacy. We are a married couple.......seen it all, done it all. So privacy is not an issue. If we had guests who really, really needed to go. We would put up the aft cabin curtains and go stand in the cockpit so as to give them some privacy.
These are little boats, people should remember that mod-cons are basic, just like camping.
Martin.