Hypersmurf said:
What if they saw someone use it to summon a fiendish hawk?
The spell could be Summon Monster I... but it could be Summon Monster II.
Would you require an Identify in this case before they could attempt to use the wand?
Well, there are three factors to consider. First, the activation word. It can be anything, but this we already know. Second, the spell in question. Given your example, it could be either Summon Monster I or II, but the observer may not necessarily know which one it is. Even if the observer is able to determine what level the spell is, that doesn't necessarily mean that he now knows which Summon Monster spell is being used.
In fact, it might not be a Summon Monster spell at all. There's the possiblity that its a Summon Fiendish Hawk spell. Granted, such a thing would require the addition of a new spell (house rule) on the part of the DM, but the rules as they stand define that there is a difference between a Summon Monster I spell and a Summon Fiendish Hawk spell, which brings us to the thrid part...
The rules state that in order to be able to use a wand, you must 1) know the activation word, and 2) you must have the spell on your class spell list. Also, the wand might reveal its activation word and the stored spell when you pick it up anyway (if you allow self-identifying items). If the wand does not identify itself, you have to identify it, and doing so requires magic.
Now, if the baddie activated the wand in front of you, and within ear-shot, there's a good chance that you heard the activation word anyway, so you've got that piece of the puzzle. However, you still don't know what spell is stored inside it. Even if you have cast and seen cast both Summon Monster I & II previously, you have no guarantee that either of those spells are stored in the wand.
You essentially have two choices as a DM. You can take the less restrictive route and allow the character to play the guessing game. Conversely, you can stick with (what I believe to be) the rules, where determining the method of activating a magic item requires identification (such as with the Identify spell).
One is restrictive, just like most of the rules already are. The other is easy going. I prefer the former.