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Is there a VPN/tunnelling method which you can use to browse the web, but will also prevent somebody from seeing your IP address if they were sniffing the network?

I wasn't sure if the IP address always has to be visible, as the IP address is needed for delivery.

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what exactly do you mean? No one will be able to see what goes through your tunnel and where to (except the other end of the tunnel, aka proxy server), excepted naturally someone who sniffs after/on the proxy server. But in most cases one can detect that you are using a tunnel, and detect the ip adress which uses the tunnel. – joni Jan 9 at 21:39
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Your IP address will remain visible to anyone in the same network as you, because yes, it is needed for communication with the VPN server.

In most configurations, though, users in the same network will only see packets going from/to the VPN server, while the final destination will only see the VPN server's address. In other words, the VPN will hide where the packets go. With encryption, it also hides what you are sending, so in the end it does not really matter; after all, the same network probably has tens or hundreds of other users with similar IP addresses. Ditching the IP protocol completely would make you more suspicious.

      you                vpnserver              webserver
[10.142.257.16]    ↔    [8.613.50.9]    ↔    [193.419.61.11]

                   ▲
          other users here see
          only "you↔vpnserver"
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hey grawity, could the VPN server actually be on my client if i was using like a CISCO Client software, installed on my machine? – Darren Jan 9 at 23:52
@Darren: Unlikely. I mean, it's technically possible, but when it comes to VPNs it makes absolutely no sense for the client and server to be on the same PC. Besides, it is called "Cisco Client"; it connects somewhere else. – grawity Jan 9 at 23:56
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