The main problem is somebody sniffing the network. At least when
the traffic is encrypted the attacker now has to unencrypt it.
Depending on your encryption this could take minutes or months.
How big of a risk does authenticating over an unencrypted line
pose. Depends on what your authenticating to, if its only your
youtube account then you will probably dont have much to worry
about, if your authenticating with your bank for perhaps a money
transfer - then this could lead to problems.