First of all, you’re assuming they are using WEP, WPA or a method of encrypton to connect to an access point.
You don’t need a password or key to gain access to a wireless network that is unsecured.
Ok, back to my first statement. I agree with the well defined posts on encryption. One of them applies to the authentication procedure and the last one applied to a type of file encryption rather then a transmission and receive methodology such as asymmetrical key encryption.
WPA is a challenge to crack and/or bypass that many have failed at. Is it impossible? No. Has it been done? Yes.
The term “sniffing” for wireless signals was one the most common method used by amateurs in the field. With the encryption advances in WPA, that is now becoming less and less of an issue. The people that want to steal your information will take the easiest paths and there are many easier ways to get your information if they have access to the same access point and subnet as you.
I hope this answers some of your questions, good luck.