IEEE802.11 is a standard proposed by the
IEEE to support ethernet traffic over an ad-hoc wireless network.
IEEE802.11b is a sub part of that standard that supports transmission and reception in the unlicensed part of the spectrum used by microwave ovens at around 2.5 Ghz.
The standard provides for rates of upto 11Mbs over ranges of 100 meters in an omnidirectional mode, and in practice upto 30km can be achieved, legally, with directional antennas over line of sight links in most jurisdictions.
The hardware for this is becoming very inexpensive and popular, but some issues remain.
Security is bad, the standard's security features have been cryptanalysed and are not considered good, but may deter casual snoopers.
Still the security provided is little different to that on the internet and provided reasonable techniques are used (e.g. VPN software and firewalls) problems are probably unlikely.
ISPs are concerned that these and other standards will allow their customers to easily share bandwidth. However ISPs can apply something called traffic shaping to prevent this causing issues.