There isn't a way to 100% prevent your code from being decompiled. If 
nothing else, a dedicated person could always look at the bytecode for your 
app and try and figure it out. The best you can do is what you already 
mentioned: obfuscate it to make it harder to understand from decompilation.

As to packet sniffing, your best bet is to rely on  using HTTPS. In the end, 
an android phone is basically a radio, so there is nothing that can 100% 
ensure that no one else can see what is being sent.

I will admit, thought, that security is not my forte. If you want to get 
more technical, I'd ask around in the Android Security Discussions group, 
also on Google Groups.

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