me and my friends are trying to create a network. when ever my friend A sends something to B we want to be able to see it. As in all the people in the network should be able to see it. Also we have a server running. We want to see the people logging in(or trying to login to our network) to monitor if anyone is trying to hack their way in. Would I use a packet sniffer for this? If so which one? I cant access the server logs to see who is logging in and who is transferring what, any help on which tools to use would be very helpful. There are also some windows boxes on the network.

Snort, ettercap, Ethereal, tcpdump, etc could all do what you're asking (basically just about anything that uses libpcap). The tricky part is having physical access.

You'll either need to use a dumb hub (i.e. echos traffic to all ports) with a machine plugged into it that is sniffing, or a switch with a spanning port (these are expensive), or create a network tap cable to drop off a Cat5/6 segment that is shared between the machines you want to sniff (although this won't work if they're all on the same switch), or you could use a machine on the switch with ettercap to do ARP poisoning, but that can cause severe network problems if you don't know what you're doing (which it doesn't sound like you do).

yep. i have no idea what Im doing. I cant get Samba working either...
thanks for the help!
my friends also wish to be able to intercept within each others home networks. We each have one computer on the Friends network. And we each have our own family network. Without physical access is it possible for me to access transmissions on my friends Family network?

To get any kind of network captures, you need control of some type of hardware on the same network as the traffic. If you do not control or have access to any devices on their network, then no, you cannot capture packets there.