EXPERT RESPONSE
Let me skip to Question 3 first, because it's by far the most important, and let me offer my usual advice on this subject, which is: never leave a wireless-LAN system unsecured! Ever! I suspect that if someone uploads or downloads questionable material through an open Wi-Fi system, then the feds just might come knocking at some point. I'm not a lawyer, and I don't want to offer legal advice, but, please secure your network. It's just good practice.
That being said, don't use WEP, because it's fairly easy to break. WPA is not at all easy to break, because (among other features) it changes keys regularly and defeats attacks that easily compromise WEP. If you want even more security, then use WPA2, which is based on an entirely different (and much more secure) encryption technique called AES. Regardless, one user using WPA cannot easily decrypt the data of another using the same key, because the actual keys used will be different from one another at any given moment in time, and neither user can easily determine the key regardless – these are generated by the WLAN system.
I'm not sure which Bluesocket product your customer is using, but these in general provide strong authentication and encryption. So my guess is that your customer is all set, assuming the Bluesocket gateway is properly configured. Regardless, solutions like Bluesocket's are far more secure than WPA or WPA2 alone.
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