According to the documentation, it is, but I haven't tried snooping on the client myself. So I'm not sure if the data is obfuscated in any way.
"This means when a change occurs on one Google Chrome client, a part of the infrastructure effectively sends a tiny XMPP message, like a chat message, to other actively connected clients telling them to sync."
"This means when a change occurs on one Google Chrome client, a part of the infrastructure effectively sends a tiny XMPP message, like a chat message, to other actively connected clients telling them to sync."
Source: http://www.chromium.org/developers/design-documents/sync