Seeing as this is what I am studying, maybe I can shed some light on what is going on here. When on a wireless, or even wired network, data is sent over whichever medium (radio waves/copper Ethernet). Data being sent over wireless is much more vulnerable because when it is in the air, anyone can grab it.
THEY DO NOT HAVE TO BE ON YOUR NETWORK!!!! Simply in range of it. When in range of a wireless network one can grab the BSSID (Network name, Linksys or Dynex by default. If you are not retarded you have probably already changed this name along with the password. If not, you have bigger problems.
The linux box is running what is known as a packet sniffer. A packet is a chunk of information that is sent over the network. Since the object as a whole is too big to send it is cut up into these smaller packets and transferred easily over the medium. The packets are then rearranged into the original form and put to use. This packet sniffer collects the packets and reads them. There are many programs out there that will "sniff" packets on both windows and linux, I don't know about Mac as I don't have any personal experience, but I am sure there are. Packets are encrypted by default but this does not mean that the decryption cannot be broken. Obviously some "security expert" thought that his ingenious encryption was better than the industry standard (it isn't).
The packet tracer this man was using is obviously custom written since all it displays are the hole cards. This means that he(they, whomever they may be) has/have written a program that looks for specific packets (say pattern xyzxyz for example) decrypts the packet to display the hole card information. Thus the hole cards are shown.
The amazing part is I am sure packets can be sniffed like this from FTP and Pokerstars too, it is just a matter of cracking the encryption, and since Stars and FTP use what is probably the industry standard(or better) I don't think there is too much of a worry there.
As he said this is an issue with wired networks as well, but the problem is wireless, because as I said teh hacker/script kiddie doesn't even need access to your net, just to be able to read your SSID. With wired network they will have to breach the physical security that is your front door, and hopefully we don't let that happen. This doesn't mean it can't, just that it is more unlikely.
Hope this helps.
Cheers
