We have a rather large network to handle/monitor. internal and external clients. roughly 850 internal servers and some 3000 WAN links. we use a combination of HPOV, Netcool, Lucent's VitalSuite, Sniffer, Ethereal, FlukeNetworks WGA's and T1/E1 analyzers. We do a yearly assessment to see if any of the other management products will give us what we need (scalability, ease of use, reporting, and of course price).
We've tested MRTG, Solarwinds, Tivoli, etc., etc. None of them have been able to provide the same package of functionality that we've been able to achieve with what we have now.
My personal issue with Sniffers is they cannot handle being shipped. They break entirely too easy. Also, for a Sniffer to be most effective you need to know where the problem is and capture there. We've been very happy with the Fluke tools we've used in comparison, and they are exponentially easier to use. That's not to say a Sniffer does not have it's place. The Fluke tools will point you to the problem, the Sniffer will put the microscope on it.
Ethereal is a fantastic free tool. I highly recommend it. It has great filtering capability and is easy to use.
I haven't used Observer yet, but I haven't heard a single thing bad about it. I'll be interested to test it out later this year when we do our assessment.