Many folks setting up wireless home networks rush through the job to get their Internet connectivity working as quickly as possible. That's totally understandable. It's also quite risky as numerous security problems can result. Today's Wi-Fi networking products don't always help the situation as configuring their security features can be time-consuming and non-intuitive.
Anyone within the geographical network range of an open, unencrypted wireless network can 'sniff' the traffic, gain unauthorized access to internal network resources as well as to the internet, and then possibly sending spam or doing other illegal actions using the wireless network's IP address.