tiger shark..thanks buddy.. Now it is pretty clear...

To summarize..

1) Sniffers work best with Hub type of technology where are packets are broadcasted into the network...

2) Incase of a switched Netqwork .. the placement of Sniffer is very important...

3) Sniffers would reply on winpcaps or libpcap.. to enable them to behave on promiscus mode....

4) You need a sound knowledge of TCP to be able to make some sense of the packets trapped by your sniffer....

5) If a person is able to sniff the network for long.. he/she can be able to trap passwords that travel as simple text...

6) It tells you the how ur network traffic is made of.... (TCP, UDP, ICMP etc.)

If you feel I have missed anything pls... mention that....

Regards

Kalp