wireless router password security

Hi all,

I don't know much about wireless security. I have a friend who uses a Linksys WRT54G router connected to his cable modem so that an OS X machine in a different room connect to the web using airport.

My understanding is that WRT54G is a very common router, so I hoping that someone here can help me with this. I have noticed that the airport in OS X can see several connections (presumably from neighbors), including the Linksys one. But while all other connections are password protected, the connection to the Linksys is not, and this troubles me.

On the comuter that is physically connected to the router, I have httpd to 192.168.0.1 and I've noticed that there is a place to set the password, however changing the password would not deny connections to the OS X machine. The machine sees the Linksys router and doesn't even ask for password. it gets connected right away. So I am guessing that the password is an administrative password, and not for connections.

Does the WRT54G model have a capability to be password protected? The firmware has never been updated, how essential is that for password capability or for security in general (How does one update the firmware anyway?) Since this a relatively old router, should a more up-to-date one be purchased? If not, what is the best way to secure a connection with this router?

Thanks very much,
RS
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