The 802.11 Standard in Security

Security is the most important element that seems lacking in many
802.11 implementations. Most people are left with the misconception
that 802.11 is an insecure medium that is very vulnerable to attack. The
fact is that the 802.11 standard supports two primary methods of protection:
authentication and encryption.

Authentication is the mechanism used when one wireless workstation
is authorized to talk to a second station in a specific wireless coverage
area. Authentication is created between the access point and every station
while functioning in infrastructure mode.
Authentication is either an open or a shared-key system. This means
that any wireless workstation can request authentication so that the
wireless workstation receiving the request may grant authentication to
any request. Alternatively, it may grant authentication only to stations
on a user-defined list.

In a shared-key system, only stations that have a secret encrypted
key can be properly authenticated. This means that shared-key authentication
is available just for systems that have the optional encryption
functionality.