Relax, folks, it looks like (although the media suggests otherwise) the German government can’t actually sniff the contents of your Skype conversation:

Skype is so secure, police need to actually invade your computer to eavesdrop.

The German police shopped for tools to listen in on Skype calls. Tapping PCs directly is their only option, since they cannot intercept and decrypt Skype calls over the Internet, at least not in real time, per the Federal Criminal Police Office of Germany (Bundeskriminalamts or BKA). Once these low level monitoring tools are on your PC, they can see what any program does, not just Skype. If they can eavesdrop on your PC they can see all your keystrokes, listen to all your music and speech, watch all your video, play your games.

[…]

The concept of DigiTask intends to install a so called Skype-Capture-Unit on the PC of the surveilled person. This Capture-Unit allows recording of the Skype communication, such as Voice and Chat, as well as diverting the data to an anonymous Recording-Proxy. The Recording-Proxy (not part of this offer) forwards the data to the final Recording-Server. The data can then be accessed via mobile Evaluation Stations.

…and although I won’t go so far as to say this proves anything about Skype security, it does at least provide me with extra faith that my (basically mundane) chats are securee, so long as I use a platform which I can be confident it safe against trojan-horse installation…

See also wikileaks and slashdot.