VNC's authentication processes perfectly safe. no plain text password exchange. the connection itself is not encrypted.
If you're worried about someone sniffing your session, there are some vnc addons for stream encryption.
http://www.realvnc.com offers and enterprise edition with 128bit AES
http://www.laplink.com/products/vnc/overview.asp has built-in ssl encryption
for admining a home PC, you've got nothing to worry about with regular VNC. I'm normaly a paranoid when it comes to network traffic, and I don't worry about VNC.