My son graduated with a degree in computer science from Univ of RI, sure wish I had him here this mornin, so he could explain what /Pine and jdbower were talkin about this mornin !
They are engaged in the geek version of the debate question, "How many angels can dance on the head of a pin?" and much like said debate, it reminds me of the line by Macbeth, Act 5, Scene 5, "... full of sound and fury, Signifying nothing."

Maybe not nothing, but very little.
WiFi security - With enough time and money any security can be broken, all you're trying to do is make it more difficult. Like the old joke, you don't have to run faster than a bear, you just have to run faster than the guy you're with. IOW, make things difficult enough so the hacker will move on to someone with even less security than you. This all assumes you are worthy of being a target in the first place, a big assumption.
WEP, WPA, ad nauseum - Any security is better than no security, if only for keeping your nosy neighbor's teenage kid off your network. How much security is the debate, always remembering the first point that any security can be broken. Also keep in mind, just like clothing, jewelry and yes, tractors, there are security snobs. "What!?!?! You're not running WPA2 with MAC authentication?!?!?!?! Well, I never....." as they walk away adjusting their belt AND suspenders. You might want to have devices on your wireless network that don't support some of the more secure options. (I don't believe the xBox does) Use what makes sense for you. If you live out in the boonies, with no nosy teenage kids, don't use any.
WiFi Poaching - Another 'angels on the head of a pin debate'. For me, it's much more of a moral issue than a legal one. It's not my router, it's not my ISP connection and I wasn't invited to use it. Simple decision for me.
MAC Addresses - Every piece of hardware that connects to a network has a unique one (except a Token Ring card we had at work many years ago. That was a fun problem to find and resolve!) that is burned into it. It cannot be changed, but it can be spoofed. Again, are you, or any of us, worthy of the time and effort necessary to hack into our WiFi network? Probably not.