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I installed two of the Netgear Powerline AV networking adapters last night and they work great. I went through and got both of the endpoints configured to use encryption.

I'm relatively new to these, I'm curious: With sending my traffic out over my electrical wiring (Presumably encrypted now) Does the signal / info leak out over the power grid?

I.E. could you theoretically sniff the power line for traffic if someone in your vicinity was also using Powerline ethernet?

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That would be an interesting hack if it were possible. I guess a related question is: what kind of "range" do these devices have? Would it be possible for you and your next door neighbour to share a network? If you live in an apartment building, could you (on the 3rd floor) and the guy on the 9th floor share a network? –  FrustratedWithFormsDesigner Aug 6 '10 at 15:15
    
The Signal may leak out to the power grid, your neighbours might see it. Because of that you should always set an individual Password. –  Werner Henze May 3 '13 at 12:18

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Theoretically - yes. In practice it's probably not an issue unless you live in an apartment building or your nosey next door neighbour works for MI-5. I have the same equipment and the signal degrades pretty quickly just in my moderately large house. The naturally occurring capacitance in long runs of large diameter wire (ie. back to the transformer on your power pole) will attenuate the high frequency of your network signals pretty quickly. Given enough motivation and enough $$$ for sensitive sniffing equipment maybe big brother could retrieve it, but if your secrets are that important you probably wouldn't have asked here :-)

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+1 - You were right, I answered an unasked question :) –  JNK Aug 6 '10 at 15:32

I know that for X10 devices, which allow remote control of lights/outlets over powerlines, this can be a problem. If both you and your neighbor are using the same house code, there can be interference. They even sell filters that can be installed to block this. I assume it would be the same for powerline networking.

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