Content written by Alex DeLarge and Virtua7.
GSM, which is an abbreviation of Global System for Mobile telecommunications (formerly Group Speciale Mobile) is the most widespread digital cellular phone system. The whole of western Europe uses it, most of the developed world has at least a secondary network. The main competitor to GSM is PCS which isn't in use within the UK and as such is out of the scope of this FAQ.
How do you listen to GSM conversations? Get loads of money, learn a shed load about GSM, then try to implement Shamir, Wagner and Buryakov's A5/1 real-time cryptoanalysis technique (described at http://www.snapshield.com/Articles_helpful/Real_Time_Cryptanalysis.htm). This requires a very sexy scanner, a ninja PC (or equivalent) with lots of RAM and disk space, some ninja coding skills to convert the garbage picked up by the scanner into something useful. There was a project a while back to actually do this but the costs were estimated in the tens of thousands and it never really got very far.
Potentially 3G technology should be more secure than the existing networks however as 3G is not yet in wide use it is not known whether the extra security features will be implemented properly. Users should be able to authenticate to the network whilst at the same time remaining anonymous to any eavesdropper. As well as authenticating to the network, the network authenticates to the user. After authentication the use of different ciphering algorithms can be decided.
Some flaws are already known to exist in 3G, the IMSI is send in clear text when allocating a TMS and the transmission of the IMEI is not protected at all. For this reason the IMEI should not be considered fit for use as a security feature. Eavesdropping of calls is also possible in networks which allow calls without encryption algorithms by a man-in-the-middle attack.
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What's the main difference between GPRS and GSM? In the GPRS world, only data (including SMS/MMS) is carried over GPRS. Voice traffic is still carried over the existing GSM infrastructure - hence the term '2.5G'. The equipment is also somewhat different in places. The key things to look out for are the Gateway Support Nodes (GSNs), *Mandatory* DNS servers, Lawful interception Gateways (LIG) and Border Gateways (BGs). Both Ericsson and Nokia have a large amount of information regarding GPRS infrastructure on their websites respectively. A quick Google session is likely to turn up most of what you need to know.
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As well as Google, all of the GSM/GPRS/3G standards themselves are available from ftp.3gpp.org. Be warned, some of them can be difficult to read, but persevere and you'll get the definitive word on whatever you're trying to find out. At best, they read like RFCs. At worst, they read like Chekov, translated into Chinese. If you prefer some paperware documentation, for GSM I recommend Redl, Weber and Oliphant's 'An introduction to GSM' (ISBN 0-89006785-6). For an understanding of GSM/GPRS that doesn't focus too much on the Radio side, look at Eberspacher, Vogel and Bettstetter's 'GSM Switching Services and Protocols (2nd edition)' (ISBN 0-471-49903-X). If you're after a greater understanding of 3G, stick to the standards as most of the books I've seen seem to quote them directly almost throughout.