While it is a federal offense to hack a Gmail or Yahoo email account nonetheless many of these accounts are compromised every month. The #1 way I have seen domains stolen through DomainTheft is by people hacking-into an existing GMail or Yahoo mail account so this is definitely a problem. Just think – it is considered felony grand-theft to steal a car, but this doesn't stop thieves from stealing a car.

Now onto the security differences. GMail and Yahoo mail and other free email programs have known security holes and hackers/social engineers can find their way into these account without too much of a fuss. Here is a link to a video actually showing how people hack GMail with known encryption algorithm security flaws: http://www.youtube.com/watch?v=uLFURwOPbpY

Using your own private email account hosted through your hosting provider is usually more secure because hackers spend less time trying to find vulnerabilities in lesser-known systems. GMail and Yahoo mail are big targets and one's that hackers enjoy getting more credit for gaining access to and sharing online. Try doing a quick Google search for “hacking gmail” and you'll find plenty of people explaining exactly how this is done.

Oftentimes a major technique you can use with your own account as well is to forward your email address to a different address at a completely different domain. This means even if the email address is compromised they won't actually have access to your mail as it is just a pass-through address.

Many computer security experts (I went to Carnegie Mellon and had some friends that worked at CERT) suggest staying as far-away from services like GMail and Yahoo mail when dealing with sensitive data due to the fact that they have been proven time and time again to be less secure than an email account you setup through your hosting provider.

To keep your email safe most security-experts suggest using a hosted email account and for sensitive information encrypting your email by only sending over a secure connection. At the end of the day I always feel you are better safe than sorry.

Thanks again for the question!