Declan McCullagh has a great overview of the security of Chat. And by chat, I mean computer and cell phone instant messaging.
The question of whether your IM chat is secure is really several questions:
Are you wireless, and is the wireless connection secure?
If you are wired, was there a secure log on?
Does it provide complete encryption?
If you’re discussing your thoughts on the latest action film, the security probably isn’t top of mind. But if you use IM for business and discuss proprietary ideas, work-for-hire, or use it to get other sensitive information- like logins or passwords to something else, then the security of your chat is paramount.
If it is not important to you, McCullagh points out:
Encryption is important. If you’re using an open wireless connection, anyone who downloads free software like dSniff can intercept unencrypted IM communications streams.
WildPackets sells to police an EtherPeek plug-in it says can intercept and decode unencrypted IM conversations in wiretap situations (plus Web-based e-mail, VoIP calls, and so on).
To chart the differences, he surveyed companies providing popular IM services and asked them to answer the same 10 questions and then charted the answers for easy comparison.
Read the CNET article for the complete rundown.