While passports with chips embedded are not nearly as "yesterday" as the old style ones, they are still (a little) open to identity theft.
The chips are activated by a radio frequency, hence RFID - radio frequency identification. Passports have to be close to the scanner for a signal to be transmitted, and only authorised agencies are supposed to have the scanners, but it is possible for criminals to mimic the system.
See
wikipedia for specific passport information for each country.
This link mentions some of the security concerns.
Cheers,
O8