WEP stands for Wired Equivalent Privacy is a security protocol, specified in the IEEE Wireless Fidelity (Wi-Fi) standard, 802.11b, that is designed to provide a wireless local area network (WLAN) with a level of security and privacy comparable to what is usually expected of a wired LAN. A wired local area network (LAN) is generally protected by physical security mechanisms (controlled access to a building, for example) that are effective for a controlled physical environment, but may be ineffective for WLANs because radio waves are not necessarily bound by the walls containing the network. WEP seeks to establish similar protection to that offered by the wired network's physical security measures by encrypting data transmitted over the WLAN. Data encryption protects the vulnerable wireless link between clients and access points; once this measure has been taken, other typical LAN security mechanisms such as password protection, end-to-end encryption, virtual private networks (VPNs), and authentication can be put in place to ensure privacy.

A research group from the University of California at Berkeley recently published a report citing "major security flaws" in WEP that left WLANs using the protocol vulnerable to attacks (called wireless equivalent privacy attacks). In the course of the group's examination of the technology, they were able to intercept and modify transmissions and gain access to restricted networks. The Wireless Ethernet Compatibility Alliance (WECA) claims that WEP - which is included in many networking products - was never intended to be the sole security mechanism for a WLAN, and that, in conjunction with traditional security practices, it is very effective.

From Whatis.com