I'm a little confused by the usage of the word "jailbreak" in this article. Neat proof of concept, though!

So what is the best way to set up and configure a Wifi-proxy or MITM for sniffing Android network traffic?

Probably through a usb-tether from a desktop is the easier than trying to mitm over wifi

Charles (Mac) or Fiddler (windows) are the two options I'd use.

That's some questionable security on Razer's part. Seriously, unsigned?