i answered your legality question.
"It depends on what the meaning of the words 'is' is"
edit:
no a network admin would not know if you are using it.
from what i understand, you are just sniffing packets.
edit edit:
you should only be concerned about netgrep finding plain text passwords, and since you are using a vpn, ssh tunnel and/or ssl connections when doing important things, you shouldn't worry.