I've talked in the past about determining how worried you should be about security with an emphasis on wireless security: it comes down to determining the likelihood of attack, the liability of having your network accessed or your data stolen, and the cost in time and effort of achieving the level of security you'd like (see "Wireless Security Needs: The Three L's" in TidBITS-725). When it comes to security, there is no right answer; it all comes down to individual situations.
When using your own wireless network, the simple answer is to ensure security with WPA (Wi-Fi Protected Access) and a strong password. But what about when you're using a public Wi-Fi network at a coffee shop, hotel, or airport? In such a case, it's easy for anyone on the network to run a traffic sniffing program that would watch all the data you send and receive and pull out your passwords as you check mail, for instance (I've seen someone do this at a conference as a wakeup call; he warned everyone whose password he was able to see). One way of protecting not just your passwords, but all your data, is to use a VPN, or virtual private network. Normally you need special hardware and software to set up and run your own VPN, but with a service from TidBITS sponsor PublicVPN.com, you need nothing more than an account and the instructions PublicVPN.com provides to configure your VPN settings in the Internet Connect application. Once it's established, all your traffic runs through an encrypted tunnel to PublicVPN.com's servers and from there out onto the Internet. Anyone attempting to sniff your traffic would see only unintelligible encrypted bits.