mach5 - if you have travelled extensively, you may have discovered that some hotels, many internet cafes and a variety of other places that provide internet access have unscrupulous people managing the network. In third world countries, particularly, there are very real dangers in using naked internet services. Man in the middle attacks are common and can result in identification theft and other serious problems.

You point out that Tor routes traffic through three intermediate nodes before exiting into the Internet. You are correct. However, the only node that can see your packets is the exit node, the intermediaries are tossing around completely encrypted packets. So it is possible that Tor exit nodes could attempt man-in-the-middle attacks doing such things as presenting fake SSL certificates or artificial proxies for well known services, however, all such Tor exit nodes are ip-logged within the Tor cloud and these types of activities are hunted for and investigated by a rather large community. I guess you could say that you are trading a completely unknown set of dangers for a specific and heavily policed danger, a trade well worth making in many situations.

Your mileage may vary.

I am also not a networks genius, but if you do a bit of simple Googling, there are very simple examples and plenty of understandable information why Tor is a good and workable idea. By design it is more secure than "naked" IP traffic. Plus the underpinnings were built by the US Navy and the Electronic Frontier Foundation. This isn't a garage project just because it's open source.

Yes.. corpus... this is stupid!!!

@ corpus - i am no genius to networks but wouldn't using tor for your online banking mean that your sensitive information is being routed through random computers donated by random people thereby potentially exposing it?

This is one of the most important apps available. Using this, you can anonymize internet traffic at the expene of a little latency. I configure Firefox to run through Tor and Safari to run naked. If I am traveling or on an open network, I exclusively use tor for traffic I am concerned about (e.g. online banking and whatnot). You simply avoid man-in-the-middle attacks, phishing, sniffing and other gibbersh with Tor. You also are completely anonymous.