I recently upgraded to version 2 and was greatly pleased with new features and general elegance. Highly recommended. I now keep the new connection tracking window open and watch the connections. My main use is to block phone home connections and cross-site flash advertisements or other connections.

After a little research I am more confident that this application is trustworthy and doesn't have secret backdoors or other nasty features (tho, never 100% sure). See objective development forum discussion about whether anyone can bypass little snitch. Consensus is that almost nobody can bypass little snitch. However, there is still some concern that Flexnet software that Adobe uses may have some really sneaky low level hack into OS X kernel in order to catch adobe sw pirates. But nobody claims to have seen anything with a packet sniffer.

All in all, little snitch seems to have pretty tight security. And certainly quality at the visible level.