I recommend getting a wireless router with the modem built in, there not much more exprensive and they save on the wires, which is the point i think.
As for security i agrees with Byteman, use an encryption WPA preferably. Dont broadcast SSID, turn of DCHP, and employ MAC encryption.
Within range of my flat i have 4 other wireless networks all using wep encryption. If i wasn't so honest i'd run aircrack on their arses. But hey they are my neighbours