If you have a wireless router at home then I'm sure you have setup some type of wireless security. If you haven't then you better think about doing so ASAP. You may have noticed all the different types of options you have to choose from to secure your wireless network.
One of the options you may see would be WEP (Wired Equivalent Privacy). WEP is an older method and is now considered to be inadequate because it can easily be hacked because of flaws in its encryption methods. WEP works by using secret keys, or codes to encrypt data. Then there is the next level called WPA (Wi-Fi Protected Access) which offers stronger encryption compared to WEP.
If you have newer networking equipment you should have an option for WPA2. WPA2 is a newer version of WPA and has been available on all certified wireless hardware since 2006. If your wireless router is older than 2006 then it may be time for an upgrade if you are worried about security.
Although WPA is still very secure it has been found to be vulnerable to hacking in some cases. WPA2 provides stronger wireless security than WPA and is stronger than WPA due to its superior encryption algorithm. WPA2 is part of the 802.11i standard and has been designed from the ground up. 802.11i uses the concept of a Robust Security Network (RSN) which supports additional security capabilities. WPA2 requires the use of stronger wireless encryption than what WPA does making it harder to hack. WPA only supports TKIP encryption while WPA2 supports the AES (Advanced Encryption Standard) based encryption mode with stronger security. WPA2 also doesn't allow the use of the TKIP (Temporal Key Integrity Protocol) algorithm like WPA does which has known security holes.
One potential downside to WPA2 is that it requires more processing power compared to WPA and it can slow down a network if you are using older hardware that is not in sync with WPA2. If your wireless network hardware is compatible with WPA2 then performance hits will minimal and you most likely won't even notice.
Most home users should be ok with either WPA or WPA2 as long as you have a proper password. You should make sure your password is as complex as you can by using upper and lower case letters, numbers and special characters.