They say they increase damage to flanked targets, but they also say sneak attack, which gives bonus damage based on a variety of conditions, not just flanked. So which is it for these boots? Is the damage increase only for Flanked, or does it grant an all-around (though minor) version of the rogue's Sneak Attack?

It does what it says - not more, not less. 10% extra when the enemy is flanked. So if you're using phantom foes (cipher lvl. 2) it's a nice item to have. Works also on non-rogues and also ranged. You can use it to give your tank or ranged chars a baby sneak bonus or pimp your rogue even further (I don't think it gets suppressed by the original sneak attack, but I'm not 100% sure).

Thank you for the info. If I had known about these boots, I probably would have taken Phantom Foes on Grieving Mother! It seemed like a lackluster ability not worth the casting time, especially without a rogue in my party. Eh oh well, now I know and might take advantage of them on a future play through.

Yeah, I use phantom foes (PF) a lot because i have two melee rogues with deathblows and I combine the long lasting and very large PF with some other debuff that enables sneak attack - amplified wave for example. This way deathblows get triggered all the time and the Stalking Boots add a nice litte bonus on top. Without rogues I would't need PF I think.