Explanation
Eavesdropping
In general, the majority of network communications occur in an unsecured or "cleartext" format, which allows an attacker who has gained access to data paths in your network to "listen in" or interpret (read) the traffic.
When an attacker is eavesdropping on your communications, it is referred to as sniffing or snooping. The ability of an eavesdropper to monitor the network is generally the biggest security problem that administrators face in an enterprise. Without strong encryption services that are based on cryptography, your data can be read by others as it traverses the network.

Explanation/Reference: http://www.usewisdom.com/computer/passwords.html