The above posters are mostly correct. However, the TCP/IP protocol section above is horribly flawed.
1) TCP/IP is not responsible for the requests being mirrored to all computers on a network...that's the physical link and data link layers.
2) The "gateway" does not go out and get pages for you. The gateway just tells your computer where to go next in the network. A proxy would actually go out and get pages, then re-serve them (like...you know....a proxy).
But essentially, if someone takes an interest in your browsing habits, they can look at everything that your system transmits and receives. This is why most browsers initially give you a prompt like "you are sending data unsecured, do you want to continue?". There are a few protocols that are encrypted, and thus impossible to sniff (admin can tell that you are doing something, but can't read it) Among these are https, and ssh.
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"I can't understand why people are frightened of new ideas. I'm frightened of the old ones." -- John Cage (1912 - 1992)
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