A typical example of this type of attack is the “Man-in-the-middle”: a person is able to read or modify messages between two people without they realize.
The “attacker” must be able to observe and intercept messages between the two victims, that is, to be able to read the packet travelling to come up with the original text.
A typical use of packet sniffing [I1] [I2] [F1] [E1] [E2] [E3] [E4] [E5] is to read passwords.
This type of technique is also used by police (FBI) whose official tool for packet sniffing “Carnivore” is used for interceptions.