How to secure one's Bitcoin Client from packet sniffing?
A hacker that has physical access to your network and computers can always find a way to abuse that access but SSL is a very good deterrent and is supported by bitcoind.  Click here to see a guide on enabling SSL for bitcoind.

For securing the communication between nodes you might want to try tor.  It basically makes sure that all traffic on your network is encrypted but still allows you to connect to an encryption-less service.