Consider the situation that you have a WiFi router and that you want one of your neighbors to make use of it, consider that his neighbor also wants to make use of your connection. Considering you do not have any problem with it this can be quite nice to start a neighborhood network. The problem you might face is that you are not able to cover the entire area with one single WiFi router. In this case you want to extend your WiFi signal in such a way that all the poeple who want to use it are able to pickup the signal. You might want to start digging and placing cables to places where you can place an other WiFi router. You also might consider to repeat your signal over several WiFi routers.
In this case you have one (or more) centralized WiFi routers which are connected to the backbone of your network from here you send your signal via WiFi to an other router which re-destributes the signal. So You will end up with some routers which do not have any cable plugged in. For example you can use the out of the box functions of a LinkSys WAP54G or WRT54G WiFi router to use it as a wireless repeater. Some great guides on how to setup a router in such a way are published so I like to point out the one I used from Nohold.net, you should check out this guide when you like to setup a wide WiFi network quite simple and fast.
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