1) it depends how many people are using, what they are doing and what kind of connection speed you have. i have 4 computers: 2 LAN and 2 WLAN. My speeds are only 3.0M downloand and 756kbps up. I use bittorrent and seed at 20kbps and everyone just web surfs and no slow downs. However, when the other people start watching youtube or just videos, everythign slows down a bit, so i turn off bittorrent.
2) the best kind of security avaible for consumers right now is WPA2. And yes GSRCRXsi, WPA1/2 is much better than WEP because it constantly changes the key and the keys itself are larger, so the packets are sent less often to people who are watching it and trying to crack it. ALso use WPA-PSK because its desigined for home and small offices, much easier to configure.
The best way to be sure no one is leeching off you, is to change the SSID of your router from the default, turn SSID broadcasting off, set up a WPA (WPA2 preferably) and set MAC filters. The SSID makes sure that people dont know the name if your network; no name? no go. If the somehow figured it out, it will require them to use a key. Even if they find that out, if their MAC addy's dont match up to your filter, they wont be able to get in.