from the README:

Passive OS fingerprinting is based on information coming from a remote host
when it establishes a connection to our system.  Captured packets contain
enough information to identify the operating system.  In contrast to active
scanners such as nmap and QueSO, p0f does not send anything to the host being
identified.
  
For more information, read Spitzner's text at:
http://www.enteract.com/~lspitz/finger.html .

from the maintainer:

Use of this program requires read access to the packet filtering
device, typically /dev/bpf0.  Granting such access allows the users
who have it to put your Ethernet device into promiscuous mode and
sniff your network.  See
http://www.infoworld.com/articles/op/xml/00/05/29/000529opswatch.xml
if you do not understand how this can be harmful.  Running p0f with
no options will cause it to analyse packets intended for other
hosts.

Trevor Johnson
trevor@jpj.net