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If I'm using a VPN service such as this, would my ISP still be able to read my internet traffic?

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Theoretically... yes. –  muntoo Mar 13 '12 at 4:50
    
BTW For the ins and outs of how VPNs work listen to Security Now episodes 14, 15 and maybe 19 (grc.com/sn/past/2005.htm) - or read their transcripts. –  Jan Doggen Jun 5 '13 at 13:46
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3 Answers

No, assuming the service is done right, the ISP will only see the encrypted traffic. Keep in mind that if someone can access your computer, or has access to the service, there are other vulnerabilities you could be exposed to.

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(@musicfreak, I changed the question, then saw the edited answer which also rendered your comment invalid, so I changed the title.) –  Arjan Dec 16 '10 at 10:23
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Yes the isp can see your surfing traffic and dns queries if your vpn is set up as split tunnel (where only traffic going to your corporate network goes over the encrypted vpn tunnel and every thing else goes out the regular internet path)

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I'm not on any corporate network, I'm using net from my home. Would my ISP be able to read anything not encyrpted if I used a vpn? –  Click Upvote Dec 28 '10 at 13:30
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I use a VPN through my ISP and I use it to connect from other remote locations to my network back home and that traffic is enrypted from my ISP or anyone else for that matter. However, your surfing from home is no different than if you didn't have a vpn. Remember the VPN, in most cases, is so you can extend your network, not the ISP extending it's network. This article can help out...http://computer.howstuffworks.com/vpn.htm

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