...

What type of attack was used in the famous test? Known plaintext? It gets a bit tougher in the real world doesn't it?

Not really.

Even if you don't know what you're looking for? Help me out with that one.

* PGPfone on a very fast cpu plus fast link is still less pleasant than a noisy cordless (no pun intended).

You trust PGPfone on commercial HW enough to do your spy work with it? A system with dedicated audio compression ( http://www.dspg.com/ e.g. ) and a modem could probably be used to establish a secure, full-duplex link over the POTS. A microP, possibly with a small gate array to accel the crypto, would be able to handle the rest of job. Actually a pretty simple product. It could even use your dial-up account and be your internet phone. I know it has been done. I just won't be happy 'til it's in 50 million homes.

* We'd never take encryption hardware through the same path as modems, would we? First used between companies, then used for remote access, eventually you can't buy a bloody machine without one. Getting cheaper, faster, closer to the motherboard, taken for granted by applications. Ever seen a 300 baud, 40 lb modem, cost probably $3000 in 1970 dollars?

Yes, I have. Fortunately encryption HW will not have to go through that sort of process. The frontier has been tamed, there are freeways everywhere - all you have to do is pick a lot and build. IOW - that 300 baud modem if done from scratch now would cost nowhere near $3000/unit.

The final level of deployment is when garage-door-openers, car remotes, and childrens' toys (e.g., radio controlled cars) use encryption chips... or chips with encryption, anyway.

The time is ripe.

The outside encrypting unit should also perform NAT, otherwise the PC (doing the tunnelling) can broadcast traffic ('trap and trace' in the pots world) info.

Clueless again! What is 'NAT'?

Email is so low-bandwidth that software suffices.

Absolutely. The issue there is more one of trustworthy HW and SW. Back to WINTEL/MICROSNORT. Again, !barf!.