Now that the RIAA, MPAA, and who knows how many government agencies are sniffing internet traffic in order to find subvers^H^H^H^H^H^H^Hpirates, it would be nice to have an ironclad method of achieving plausible deniability.
In Slashdot and elsewhere, we've heard of a possible solution: open up your WiFi access point. With an open WiFi access point, traffic analysis can no longer conclusively prove who sent which packets.
The problem is that an open WiFi access point creates a different set of problems. Random strangers will be able to probe within your home network. They'll be able to eavesdrop on the traffic between your own computers. And of course they'll be able to gobble up your bandwidth.
But maybe there's a solution here after all. What if you bought two WiFi routers, opened one up to public access, locked the second one down, and routed the locked-down router through the public router? Linksys publishes a document called "Cascading (Connecting) a Linksys Router To Another Linksys Router" that inadvertently describes exactly how to do this.
The upshot is that your internet connection will be opened to the public, yet your home computers and home network will still be running encrypted and will still be safely behind a private firewall. All home traffic will flow through the public router, where it will join the anonymous traffic coming in from strangers, thereby creating plausible deniability.
All for fifty bucks.
The problem of strangers hogging your bandwidth can, I think, be addressed with the QoS settings. On my Linksys WRT54G, the configuration menu offers QoS settings under "Applications and Gaming" | "QoS", and allows a specific port (the one connected to the private router) to be given highest priority. You could also reduce the open router's WAN speed to 11 or so Mbps (under "Wireless" | "Advanced Wireless Settings"), though you shouldn't reduce it too far, lest the dysthorities see more suspicious bits per second than an anonymous user could possibly be consuming.
If you live in a house with few close neighbors, you can upgrade the open router's antennas in order to sweep in a larger area of potential anonymous users. Wal-mart sells antenna upgrade kits for forty-five dollars. Of course you wouldn't want to do this in an apartment complex where there are already lots of nearby users, because the whole point of this setup is to have the potential for anonymous users but as few actual anonymous users as possible.
P.S. I have heard that some newer brands of wireless router have a feature built right in to allow anonymous use of the internet connection. I don't know how this works, but I'm suspicious that those routers might somehow treat the anonymous traffic differently, in such a way that it could later be identified and separated from 'home' traffic. That would be a Bad Thing, as far as plausible deniability is concerned.
P.P.S. I got this idea from the Tor documentation, which mentions the useful legal effect of serving as an internet connection for random strangers.