How do I know what WiFi spots are safe??
In general, all Public WiFi hotspot traffic is as described, although you may feel like you're sitting at your own private computer, it's not. It's actually really like talking loudly in a crowded auditorium... Other people in the same "room" can either choose to listen to you or not.
So, the advice to act as though someone is always looking over your shoulder is good advice.
But, the news segment is slightly misleading in that it suggests that by only packet sniffing someone can walk straight up to the the person who generated the traffic. Unless that person is wearing a nametag to match personal information typed in clear text or similar, that's not likely going to happen.
But, it does mean that personal information typed without the "padlock" or without setting up a VPN to a trusted network can be used for things like identity theft later (Side note - It appears that although not a public WiFi hotspot, the TJX investigation has revealed that the largest identity theft incident to date probably started with similar WiFi clear text sniffing).
The news segment also should have mentioned that despite the dangers of WiFi Hotspots, using your own laptop is still vastly preferred over using a kiosk or other public shared computer because of the danger of installed keyloggers.
I guess your question depends on what your doing when you ask if WiFi is safe.
Surfing sites that use HTTPS with a decent level of encryption would definitely be safer than surfing standard websites where everything is sent in clear text. It's also important to verify that you are not first logging into a non-secure site that only becomes secure after you log into it as you run the risk of your personal information being compromised by an identity thief. Reading the news or checking stock prices for example is safe...but be careful when doing social networking, banking or online transactions.
Be sure your always on a secure (https) site if you must do those things on WiFi.