I don't think anyone can read your cards. The explanation I got was that info reguarding your cards is sent only to your computer until the time then the cards are revealed. Thats not as inconcequential as it sounds. That means that even if someone were to reverse engineer the software the information reguarding your cards is just not available to them. The only way they can see your hidden cards is if they hack into your computer. It would be a monumental (though theoretically not impossible) task to get your IP address given the amount of players on at any given time just to single you out. At lower limits it just not worth the time or aggrevation. If you have a decent firewall you can be 99% sure your cards are safe.
As far as sites go it depends on what you want to play. If you want to play cash games them Party Poker is the place to be give the amount of absolutly horrible players on-line at any given time. Without looking I think Jack still has a decent sign up bonus on the site somewhere. If your a tournament player you should consider one of the smaller sites, Absolute, Pacific, Full Tilt, etc... I recommend them over Poker Stars simply because you will not find the 2000+ player fields at these places and when the number of entries hits that high it really is a crapshoot simply because of the enormous number of chips in play. The sites I mentioned have cash games as well but the number of players in a tournament is usually no higher than 400 or 500 which means you get paid for finishing around the top 50 and thats not very difficult if you play any kind of decent strategy. I was getting killed at tournaments at Party and Stars even though I though I was playing well, then I tried other places and started cashing on a fairly regular basis and even won a MTT on Absolute the first week I played there. Tell me what kind of player you are what limits you want to play and I can probably direct you to a good site and most offer some kind of sign up bonus.