Does PhotoStream send pictures encrypted over the Internet? When I'm on a public Wi-Fi network and my photos are being synced to Photo Stream, is there any way for someone on the same network to be able to see them? What about anyone else on the way to Apple's servers?
Yes, everything sent to or from iCloud is encrypted with SSL:

iCloud Security
iCloud secures your content by encrypting it when sent over the Internet, storing it in an encrypted format, and using secure tokens for authentication.
Encrypting content that is sent over the Internet
The following content is encrypted using SSL (Secure Sockets Layer) when sent over the Internet to or from iCloud:

Photos in your Photo Stream
Documents in the Cloud
Backup data for your iOS device

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