http://support.apple.com/kb/ht4199
iOS and OS X: Recommended settings for Wi-Fi routers and access points
"Security
Set to WPA2 Personal (AES)
Description The security setting controls the type of authentication and encryption used by your Wi-Fi router. This setting allows you to control access to your wireless network, as well as to specify the level of privacy you'd like to have for data you send over the air.
More details WPA2 Personal (AES) is currently the strongest form of security offered by Wi-Fi products, and is recommended for all uses. When enabling WPA2, be sure to select a strong password, one that cannot be guessed by third parties.
If you have older Wi-Fi devices on your network that don't support WPA2 Personal (AES), a good second choice is WPA/WPA2 Mode (often referred to as WPA Mixed Mode). This mode will allow newer devices to use the stronger WPA2 AES encryption, while still allowing older devices to connect with older WPA TKIP-level encryption. If your Wi-Fi router doesn't support WPA/WPA2 Mode, WPA Personal (TKIP) mode is the next best choice.
Note that the use of WEP is not recommended for compatibility, reliability, performance, and security reasons; WEP is insecure and functionally obsolete. However, if you must support legacy WEP devices and you have a newer (802.11n) Wi-Fi router, you may be able to select the WEP Transitional Security Network (WEP TSN) security mode. This mode will allow legacy WEP clients to join your network with WEP encryption while allowing newer devices to use more modern and secure encryption modes, such as WPA TKIP or WPA2 AES. If WEP TSN mode is not supported, then WEP128 with Shared Authentication should be used (with a single WEP key in key index 1). For compatibility reasons, WEP128 networks should use 13-character ASCII passwords.
For reference, "None" or unsecured mode, provides no authentication or encryption. If you use this security mode, anyone will be able to join your Wi-Fi network, use your Internet connection, or access any shared resource on your network. In addition, anyone will be able to read any traffic you send over the network. For these reasons, this security mode is not recommended.
Note: Due to serious security weaknesses, the WEP and WPA TKIP encryption methods are deprecated and strongly discouraged. These modes should be used only if it is necessary to support legacy Wi-Fi devices that don't support WPA2 AES and cannot be upgraded to support WPA2 AES. Devices using these deprecated encryption methods will not be able to take full advantage of 802.11n performance and other features. Due to these issues the Wi-Fi Alliance has directed the Wi-Fi industry to phase out WEP and WPA TKIP.