Tor actually works pretty... (29 Dec 2004)
Tor actually works pretty well. Of course, this is before it has been really hit hard by any sort of user base (people are only just starting to run BitTorrent through it) but I'm typing this over a real-time mixnet, end-to-end encrypted with bidirectional public key authentication. Maybe there's something to this crypto malarkey after all
Unfortunately this anonymity of Tor is far short of the real hard line systems as it has a central directory. Basically you trust Tor because you trust arma (Roger Dingledine). But maybe that's actually better because none of those other systems have actually taken off. Having hard line anonymity is no good if your user set is a couple of dozen people. I would hope for some improvements in the centralisation at some point but I'm happy with this as a starting point.
Fundamentally with any real-time mixnet, global traffic analysis is going to get you (esp with interactive traffic like ssh connections). Global observers are quite rare, and those with the motivation to invest in the infrastructure required are rarer still, but they do exist.