> How difficult is it for them to 'decode' my modem [to ISP] traffic ?
On modern modems at 9600 bps and up it's fairly hard. The traffic in both directions uses the full bandwidth, and each end does echo cancellation, subtracting out a time-delayed copy of what it sent, to recover the other end's signal. If you're sniffing in the middle without a copy of what's been sent from either end, I suppose it's possible with a sufficiently sophisticated signal processor, but it's not something you could do by plugging in an off the shelf modem and tweaking settings like you could do at 1200 bps.
R's,
John