Are iPhone email passwords encrypted?

I recently had my Yahoo account hacked. It might be that a keylogger has been installed to my laptop or desktop (scans reveal nothing however). What's interesting though is that I was using my iphone in a bar i hadn't been to before with their free wifi.

My question is this, if their wifi is being sniffed are my yahoo credentials being sent from my iPhone to the yahoo mail server in an encrypted format?

It does seem more than a coincidence that after an hour of using this wifi my account was hacked.

Thanks
Mark

Without you telling us the version of iOS you are running its impossible to give you a proper answer, but I suspect you are right about the wifi being sniffed.