WOW .... WOW ...

So much to say, so little time! I will try in chronological order.
-Is it illegal to use there wireless connection?
it depends on if the owner of the connection intends for it to be used by you, has the right to allow you to use their connection, etc.
-What are the security risks?
you name it, you got it! Even SSL connections may be observed!
-My school provides wireless access also. Are there the same risks using it as there are using someone's personal wireless connection?
Security consideration, yes, legal consideration, not to the extent that they allow you to use it.

If they didn't bother to secure thier connection is it there own fault, so I should have a free-for-all ...
You have to check with your local laws, but generally, and where I live in the US, you could be prosecuted. There has been case law ( court opinions ) concerning this to go along with the laws themselves. I think nihil provided the best advise as far as this goes, SirDice's to follow.

I read how crackers will setup Hotspotter or Karma to act as a rogue access point just so they can sniff your traffic (IronGeek). What's the likelyhood of that?
Can you afford to take that risk? Do you care if someone grabs your e-mail account and changes the password, or grabs your AO account and abuses it so you get banned, or grabs your credit card info when you ordered that new ipod or paid your car registration online? No one can give you absolutes as to the risks involved: it depends on the area you are in, the individuals who are in that area, and a host move variables. But it can happen.

This is getting long so I'll shut-up now
that never stopped me!

... an electrical engineer managed to get shocked installing a clothesline at his house ...
Not the same, and would not be considered the same by the courts!
In this case the EMF was a by-product of the wires, not the product itself!

So it looks like I don't REALLY need to worry about prosecution if I use other people's APs to surf the web, right? ... in USA
That depends .... I don't have any wireless networks, though I do utilize it with my laptop now and then ( using ssh into my network. ) However I do help manage a few wireless networks. If I caught you accessing a network illegally I would push for prosecution.
Just to clarify:
I believe in maintaining peoples' rights.
With that, I mean not just individuals' rights as I can not be that narrow minded, but rights of corporations as well, including those that supply services such as Internet access, and including those uneducated or lazy individuals who don't secure their networks properly.

To try and end this debate once and for all, just because I do not lock my door to my house does not mean I invited anyone in. Maybe it was the front door or maybe it was the back door, but if you come in my house without my permission I am going to be fearful that you have ill-intent toward me and put a few .45 cal. rounds in you. It is not up to me to decide first that you only wanted to use the bathroom. If you survive you can use that excuse to a jury. If I am not home at the time you may get out alive, but you may still be charged with burglary if you get caught.

As for
Noone here is authorized to give you any type of legal advice.
Quite right. So I suggest you go ask your attorney!

Last but not least, from the article brokencrow linked to
"Don't the police have anything better to do?"
my response would be,
Yes, but not at the moment.