Hi,
That's a good question. The encrypted tunnel protects the data being carried across the network from eavesdropping. What it does not do is protect the end points. What does this mean? Basically if you are sending unencrypted traffic is can potentially SSH does not defend against it being sniffed from either end of the tunnel.

The remote server will be decrypting your web traffic and spitting it back out onto the Internet and so information can be gathered on the server about your surfing habits. You don't need admin privileges for example to run `netstat` on the server to see what connections are being made.

Another thing to consider is other information your computer transmits when you are surfing the web. If you point your web browser to a local SOCKS proxy then the DNS queries you make to resolve web site host names will not be sent out over the secure tunnel. You might not be able to see the content of the sites you are visiting but you will be able to determine the names of the sites.

Regards,
Jim

It all depends on what you are trying to achieve. If you are seeking privacy from eavesdropping on your network then the SSL tunnel works fine. If you want to anonymise your traffic consider Tor (http://www.torproject.org/). There are lots of other VPN solutions out there that will encrypt your traffic and the best one for the job again depends on what you want to achieve.

Jimbob

BTW, this technique (SSH tunnel) is great for bypassing content-filtering proxies.