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What is the level of security offered by gtalk against eaves-dropping?

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According to Wikipedia everything is encrypted except the HTTP connections.

The connection between the Google Talk client and the Google Talk server is encrypted, except when using Gmail's chat over HTTP, a federated network that doesn't support encryption, or when using a proxy like IMLogic.[8][9] End-to-end messages are unencrypted.[8] Google plans to add support for chat and call encryption in a future release.[10] Some XMPP clients natively support encryption with Google Talk's servers. It is possible to have end-to-end encryption over the GTalk network using OTR (off-the-record) encryption.

LifeHacker has an article on how this can be achieved using SSH.

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Layman's summary of this answer: With the default setup, Google knows everything that you're saying, but generally speaking nobody else does. So if you're worried about your neighbors or even your ISP listening in, you should be good, but if you're discussing something that you don't even want Google employees (or someone who has somehow gotten access to Google's computers), you should look at end-to-end encryption plugins for your chat client, e.g. the OTR plugin for Pidgin. – Shane Sep 6 '09 at 23:26
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Better safe than sorry: Zfone is a secure VoIP phone software product which lets you make secure encrypted phone calls over the Internet. It lets you whisper in someone's ear from a thousand miles away.

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Zfone runs on Windows XP and Vista, both 32-bit and 64-bit versions. Zfone will encrypt audio and video for Apple iChat calls on Mac OS X. Zfone has been tested with these VoIP clients: X-Lite, Gizmo (audio, no video yet), XMeeting, Google Talk VoIP client, Yahoo Messenger's VoIP client (for audio), Magic Jack, and SJphone. It does not work with Skype.

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Not guaranteed; Symantec IM Manager (formerly IMLogic) is able to store logs of all "corporate messaging" and includes support for Google Talk. Whether it covers the audio is not something I know about. If they can do it, there's probably multiple products and ad-hoc methods that can do it.

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