Can I use hawKeye in another desktop environment than KDE?

hawKeye is primarily developed for the KDE desktop environment, but like any other KDE program you can run it in Gnome, Blackbox, Enlightenment, etc... all you need is the kdelibs package.

Will hawKeye replace Ethereal?

No. The intent of hawKeye is to give access to content circulating on a network, hence it is limited to protocols that carry content, like HTTP, FTP, SMTP, POP3, IMAP, MSN, ICQ, AIM, VoIP, VNC, RDP, TELNET, etc ... whereas the purpose of Ethereal is to provide developers with a tool that lets them analyze packets of any given protocol (more than 3000 protocols are already supported in Ethereal).

Is hawKeye illegal?

The hawKeye project itself is not illegal, but depending on the purpose for which you intend to use hawKeye and the laws that apply in your situation, the usage of hawKeye can be considered illegal and may result in serious lawsuits. The hawKeye developers decline any responsibility in misusage of the program.