To better understand how to protect yourself from people who may compromise your wireless network we need to learn what they do in order to get inside. To protect yourself from a breach you must think like a hacker. Chances are slim but the intruder may not be your first door neighbor at all. A hacker with a powerful high gain WiFi antenna could be sitting hundreds of meters away and siphoning off your internet connection.
Two basic things can happen:
1. An intruder can log into your network and use the Internet connection.
2. An intruder can log into your wireless access point (AP) and modify the settings to better suit his needs.
Let's examine the first of the two possibilities. Wireless routers come without any security enabled by default. This is understandable. You need to connect to your router for the first time without the password before you can create one.
If you don't set the security settings and don't create a password your wireless network will remain unlocked so anyone can connect to it. The intruders can not compromise your computer(s) easily but they can use your Internet connection.
This may not be a big deal. I typically leave one of my networks open for anyone in the neighborhood to connect to. I live in a working class neighborhood and don't mind local kids who can't afford their own Internet service.
On the other hand when you realize that a bunch of people are hogging your speed by downloading crappy YouTube videos you may want to enable security and prevent unauthorized access.
When you decide to do that use WPA instead of WEP. It is a newer and more secure standard. The way you actually implement the security will depend on your wireless router and your computer's operating system (Windows Vista, XP, Mac, Etc.) The documentation you received with the router will describe the whole process in detail. A strong password will deny hackers the opportunity to log into your network, use the Internet and make changes to your setup