Currently I'm working on setting up a wireless repeater to cover my whole house.
I'm using two linksys WRT54G routers, I have found some great firmware for these called DD-WRT, and its very easy to set-up and even easier to unintentionally offer your neibours free wireless internet access.
Using the new firmware v24 beta there is a repeater mode you can use, however currently I have not been able to set-up, something to do with network, gateway etc.
When securing a wireless network be sure to use WPA or WPA2. WEP is old and seemingly easy for someone in the know to hack. Another thing is, never allow wireless users to access you routers config screen, and if your firmware supports it use HTTPS if you are connecting to it.
Some people also use DMZ and point it to a non existant IP on your network.
Edit: 2007-10-2 I have figured out how to set-up the linksys as a WLAN repeater see http://www.dd-wrt.com/wiki/index.php/Wlan_Repeater