[LadyBrooke]

Well, the eye on the US currency is the Eye of Providence, which symbolizes an all knowing figure (now normally interpreted as the Christian God, but it has its roots in Eye of Horus, as far as I can remember). It's a very powerful symbol, certainly...the idea that there is always somebody watching you.

As far as the Eye of Sauron goes, it would be a very powerful symbol for him. It sends the message that he can see everywhere, and nothing is hidden from him. Regardless of whether that was true for Sauron, it would have been a very good idea for him to spread. The eye would demoralize those living near Mordor, with thoughts of there being no escape from the eye.