I've broken your question(s) down into three parts, so as to provide
you with the most bang for your buck. First, if you ever feel like
you're being monitored, always contact the appropriate authorities.
As to the first part of your question, 'Is it (legally) possible to
tap someone else's phone without their consent?' the answer is
generally no. Law enforcement officers acting under a court-granted
warrant, the FBI, or the Attorney General, or one of his agents) are
permitted the authority to tap the phone(s) of an idividual when
investigating certain crimes. There is a small list of private-party
exemptions (see below) that also are legally allowed.  Outside
of these exceptions, the law gives the aggreived the right to sue for
civil and criminal remedies against "unauthorized interception or the
attempted use of intercepted wire and oral communications."  Sec.
2511 of the Omnibus Law (which I've listed in Footnote 1) goes into
some detail about what all this means. I've decided to summarize,
providing relevant cites for you to check on your own (this particular
statute is fairly long):
[For clarity, my comments are surrounded by 's]
§ 2511. Interception and disclosure of wire, oral, or electronic
(1) Except as otherwise specifically provided in this chapter any
(a) intentionally intercepts, endeavors to intercept, or procures any
other person to intercept or endeavor to intercept, any wire, oral, or
(b) intentionally uses, endeavors to use, or procures any other person
to use or endeavor to use any electronic, mechanical, or other device
to intercept any oral communication when--
(i) such device is affixed to, or otherwise transmits a signal
through, a wire, cable, or other like connection used in wire
(ii) such device transmits communications by radio, or interferes
with the transmission of such communication; or
(iii) such person knows, or has reason to know, that such device or
any component thereof has been sent through the mail or transported in
interstate or foreign commerce; or
. . .
[This first section basically hits on your question. This was my
original hunch, and the reason I alluded to the 'federal authority'.
Without going into too much useless legal esoterica, Congress has the
power to make these laws because the telephone wires affect commerce
among the various states. The commerce clause of the Constitution,
gives Congress power to create laws that would have an effect over
[I'm snipping some of this due to its irrelevance]
(c) intentionally discloses, or endeavors to disclose, to any other
person the contents of any wire, oral, or electronic communication,
knowing or having reason to know that the information was obtained
through the interception of a wire, oral, or electronic communication
in violation of this subsection;
(d) intentionally uses, or endeavors to use, the contents of any wire,
oral, or electronic communication, knowing or having reason to know
that the information was obtained through the interception of a wire,
oral, or electronic communication in violation of this subsection; or
(e) (i) intentionally discloses, or endeavors to disclose, to any
other person the contents of any wire, oral, or electronic
communication, intercepted by means authorized by sections
2511(2)(a)(ii), 2511(2)(b)-(c), 2511(2)(e), 2516, and 2518 of this
. . .
[Now here's a possible kicker: 2511(2) basically deals with the
loopholes, or when an individual who isn't necessarily the Attorney
General or an FBI agent, has the authority to act for the government,
and intercept a wire communication of another. These exemptions
2511(2)(a)(i): Switchboard operators or agents of providers of
communication [when acting in the normal course of business [this
protects TTY operators, emergency intercepts, quality control checks,
(ii): When such operators or providers are assisting law enforcement,
given a court order and written instrument.
2511(2)(b): The officers of the FCC;
2(c): Individuals _____who are acting under color of the law party to
the conversation______ recording a conversation for law enforcement
2(d): Where a person _____not acting under color of the law_____, is
___given consent to monitor by another party in the conversation_____
provided that conversation is ____not used in a criminal or tortious
act, or violate the Constitution of the U.S._____
2(e-f): Gives permission for government agents or officers to monitor
for Foreign intelligence issues.
. . .
[The rest of the sections deal with electronic monitoring, and that
goes beyond the scope of the quesiton. I underlined Sec's c-d because
I thought they might be relevant. While you may not give permission,
know that the other party may give consent to monitor your
conversation. You can't do much about it at that point.]
Here's the criminal penalties section:
(4)(a) Except as provided in paragraph (b) of this subsection or in
subsection (5), whoever violates subsection (1) of this section shall
be fined under this title or imprisoned not more than five years, or
. . .
[ There are extended criminal fines if the person has been found
civilly liable under Sec. 2520, which deals with the civil penalties
for a violation of this act.]
Sec. 2520: Recovery of Civil Damages: 
(a) In general.--Except as provided in section 2511(2)(a)(ii), any
person whose wire, oral, or electronic communication is intercepted,
disclosed, or intentionally used in violation of this chapter may in a
civil action recover from the person or entity, other than the United
States, which engaged in that violation such relief as may be
(b) Relief.--In an action under this section, appropriate relief
(1) such preliminary and other equitable or declaratory relief as may
(2) damages under subsection (c) and punitive damages in appropriate
(3) a reasonable attorney's fee and other litigation costs reasonably
[Here's an important subsection you may want to pay attention to: ]
(e) Limitations. --A civil action under this section may not be
commenced later than two years after the date upon which the claimant
first has a reasonable opportunity to discover the violation.
[So in short, if you've suffered some sort of harm, you may be able to
pursue the eavesdropper in federal court under this act, and again
civilly in federal court on the same grounds.
Here's how Washington State looks at these matters: ]
Under the Revised Code of Washington, Annotated, Sec. 9.73.030, it is
"unlawful for any individual, partnership, corporation, association,
or the state of Washington, its agencies, and political subdivisions
to intercept, or record any:
(a) Private communication transmitted by telephone, telegraph, radio,
or other device between two or more individuals between points within
or without the state by any device electronic or otherwise designed to
record and/or transmit said communication regardless how such device
is powered or actuated, without first obtaining the consent of all the
participants in the communication;
(b) Private conversation, by any device electronic or otherwise
designed to record or transmit such conversation regardless how the
device is powered or actuated without first obtaining the consent of
all the persons engaged in the conversation."
[However, the code specifically lays out a few exemptions to this rule
-- very similar to the Federal exemptions. (E.g., emergency,
Conveying threats of extortion, bribery, blackmail, bodily harm, or
unlawful requests or demands, those conversations which are anonymous,
repeated and occur at an 'unreasonable hour' (prank calls), or if the
individual recording is affiliated with the press and the device used
to record is made known).
If the party later chose to use such recorded information against you,
and it violated Sec. 9.73.030, the evidence would be inadmissable in
_any_ civil or criminal case. RCWA, Sec. 9.73.050). An interesting
side note: The Washington law is very privacy-centric. They provide
less exemptions than the federal law, and generally require a bit more
proof by the snooping party, as well as the clause that _all_ parties
to a conversation must give their consent, rather than the federal
requirement that only _one_ party give consent. ]
As to the second part of your question, "What do they need to
do this," the answer is, not much.
If they so chose, an eavesdropper has two main options a
'transmit' wiretap, or a 'record' wiretap. To perform a 'transmit'
tap, the eavesdropper must physically enter your room and alter the
phone by attaching a small microphone in the reciever of the phone.
Wireless mics are effective only a short range and transmit via radio
waves. Most individuals who go this route do so because once
installed, its harder to detect, and generally requires no effort
after install. Snoopers can purchase inexpensive modified FM
receivers to better pick up the wireless mic transmissions on the
conversations they wish to monitor. 
Another device, known as the "infinity transmitter" is a
small, cube-shaped device which hooks into the phone and waits until
the phone being monitored is dialed from an outside line. Upon a
connection, a small whistle blown into the mouthpiece of the dialing
phone.  I'm not entirely sure how the individual being monitored
doesn't hear this, but the article notes that these were quite popular
back in the 80s.
If the individual choses not to physically alter your phone
(say, they're adverse to entering your house) they can still monitor
by following alkemyst1971-ga's suggestions, and conducting a 'record'
wiretap. If the eavesdropper doesn't want to sit around outside all
day, they can create what is known as a 'drop-out relay,' where a
tape recorder can monitor conversations and record them, based on the
electrical signal generated from the rise of the handset. Since all
phones carry electrical signals, the drop in electricity when the
phone is removed from its cradle sends a signal, which can trigger a
tape recorder to begin recording. Most often, this is the way folks go
because making a DIY lineman's headset is fairly cheap and easy, and
hooking it up to an inexpensive tape recorder is minor work. This
site also describes a few other means for wiretapping, but for the
most part, they're variations on the themes I've included. 
There are probably other means by which someone could be
monitoring your conversation -- such as tapping directly into the CO
(central office) or further down the line. Absent some legal
authority, these methods are fairly unlikely, and the main methods
I've listed above are what would be used.
Finally, 'What do they need to make it legal' was basically
summarized in the various 'exemptions' of the laws I've listed. For
1) Attorney general, FBI with warrant, Law enforcement with warrant,
2) People acting under the color of the law (e.g., switchboard
operators, FCC officials, People acting under the color of the law w/
permission by one of the parties, People not acting under color of
the law, when an individual is not using the information for criminal
or tortious purposes, and one of the participating parties has
1) For emergency,
2) When the tap is used to monitor threats of extortion, bribery,
blackmail, bodily harm, or unlawful requests or demands
3) When the tap is made against conversations which are anonymous and
repeatedly occur at an 'unreasonable hour' (Prank calls)
4) Or if the individual recording is affiliated with the press and
the device used to record is made known.
As I've noted, there is a limitations section in the Federal
law of 2 years. I saw nothing of limitations in the Washington
statute, but that does not mean that one does not exist. I hope this
helps, but just note that its not inclusive (I've probably missed
stuff!) and this does not constitute legal advice. If you think
you're being monitored, or harassed, I urge you to talk to someone
who's way more qualified than a $5 researcher :)
 This information can be found under the Omnibus Crime Control and
Safe Streets Act of 1968 18 U.S.C. Sec. 2516 (2003).
 18 U.S.C. Sec. 2511(2003)
 18 U.S.C. Sec. 2520.
Search Strategy: For the Wiretap Act, I simply entered "Wiretap Act"
"federal" in Google.
For the 'how to's on wiretapping, I used,
"phone tapping" "how to"
"phreaking" "how to tap"
Weewh. I feel like I wrote a paper :-)