Originally Posted by lordikon
Does this prevent your ISP from knowing what your internet traffic looks like? Or just prevent the sites you're on from knowing anything about you?
I can answer this one, as an owner of an ISP.
No. regardless of which method you use to browse the internet, if you send data across our network we can see it and where it is coming from within our network. Not only can it be tracked via an IP address but also the MAC address of the computer being used, which is something not a lot of people are aware of. The MAC comes in handy when tracking someone who travels between networks as well, as MAC addresses aren't changed, and most people don't know how to spoof them.
There are other ways law enforcement tracks and monitors individuals they might think are doing things that are illegal, but I won't get into those as I could find myself in hot water.
EDIT: I will go one further on this...
If your ISP uses NAT it is possible to hide (sorta), as the only IP shown to anywhere on the WWW is the NAT address and it can be very generic, just returning to your ISP. Then depending on how your ISP monitors traffic, it may be extremely difficult for them to even know which NAT user it was. Unless the MAC of the client end is being traced, that makes it easy.Edited by PostalTwinkie - 8/13/12 at 11:15am