With this technique the raw data packages on your network are monitored as they pass by. There is no need to insert scripts in your web pages or have the Server monitor application produce log files. It is all handled on a network level.
This gives you several advantages over all other monitoring methods. First, you get access to data that neither a server monitor nor a tracker can pick up, such as "stop requests" (when a user hits the STOP button before the page is loaded). You will also be able to access extremely large amounts of Visitor data much faster. In fact, with some network sniffing products you can get statistics in real time - for any size web site.
Network sniffing in itself is just a way of collecting visitor data - like a server monitor producing a log. However, network sniffing products often come bundled with some kind of reporting software as well as modules to output the data as traditional server log files or export it directly to a database for further data mining and reporting.