1. A state into which a network card can be put, in which it receives all traffic on the network rather than just packets bound for its address. Useful for packet sniffing and network monitoring.

2. A state into which Bill Clinton can be put by assigning him a young female intern.

The trick to detecting promiscuous mode NIC cards on a network is sending an invalid MAC address in a packet across the wire. Under normal mode, cards reject such packets. Under promiscuous mode, they absorb it. This is the downfall of packet sniffers anywhere, because most (if not all) cards cannot be selective in their promiscuous mode.

The security agency, L0pht i think has released a tool to help you detect sniffers. I think it uses a variant of this mentioned hardware level trick.

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