We're not cryptography experts, so we can't verify all of the encryption claims providers make. Instead, we focus on the features provided. Bonus features like ad blocking, firewalls, and kill switches that disconnect you from the web if your VPN connection drops, go a long way toward keeping you safe. We also prefer providers that support OpenVPN, since it's a standard that's known for its speed and reliability. It's also, as the name implies, open source, meaning it benefits from many developers' eyes looking for potential problems.
Providers can also log less-specific data about when or how often you connect to your VPN service. In some cases, these logs are a routine part of server or account management, and can be responsibly separated and scrubbed. In other cases, VPN providers take note of every connection and use that information to actively police individual customers. Though it’s reasonable for companies to protect their networks from abuse, it becomes a dealbreaker when companies keep extensive connection data for a longer period of time. Some VPN companies we spoke with explained how a log might note your current connection for authentication purposes, but that log is deleted as soon as you disconnect. This kind of “live log” isn’t a concern, and even those culled every few hours—or as long as the end of each day—shouldn’t be confused with logs of your traffic and online destinations.
I recommend always using a VPN when using someone else's Wi-Fi network. Here's a good rule of thumb: If you're away from the office or home, and you're using someone else's Wi-Fi (even that of a family member or a friend, because you never know if they've been compromised), use a VPN. It's particularly important if you're accessing a service that has personally identifying information. Remember, a lot goes on behind the scenes, and you never really know if one or more of your apps are authenticating in the background and putting your information at risk.
Logging: When you connect to a VPN, you’re trusting the VPN service provider with your data. Your communications may be secure from eavesdropping, but other systems on the same VPN—especially the operator—can log your data if they choose. If this bothers you (e.g., you’re the privacy/security advocate or the downloader), make absolutely sure you know your provider’s logging policies before signing up. This applies to location as well—if your company doesn’t keep logs, it may not matter as much where it’s located. (There’s a popular rumor that US-based VPN providers are required to log, in case the government wants them. This isn’t true, but the government can always request whatever data they have if they do log.) For a good list of VPN providers that don’t log your activities when connected (and many that do), check out this TorrentFreak article.
The second thing that happens is that the web application you're talking to does not get to see your IP address. Instead, it sees an IP address owned by the VPN service. This allows you some level of anonymous networking. This IP spoofing is also used to trick applications into thinking you're located in a different region, or even a different country than you really are located in. There are reasons (both illegal and legal) to do this. We'll discuss that in a bit.
CyberGhost has been around since 2011 and has come out strongly as a supporter of "civil rights, a free society, and an uncensored Internet culture." We really liked how the company specifically showcases, on their Web site, how folks normally prevented from accessing such important services as Facebook and YouTube can bring those services into their lives via a VPN.