According to research carried out by doctoral students Sylvain Pasini and Martin Vuagnoux working in the Security and Cryptology Laboratory at the Ecole Polytechnique Fêdêrale in Lausanne, Switzerland computer keystrokes can be detected from afar by detecting slight changes in the electromagnetic radiation emitted by the keyboards.
They concluded that keyboards should not be used to transmit sensitive information and faulted keyboard manufacturers for not making keyboards more secure. In one experiment they picked up the words typed on a PC from a meter away.
In another experiment, they were able to pick up the content through an office wall. Their work is currently under peer review, and they will detail their work in a paper to be published soon. A preview of their work can be found on the school’s website.