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WiFi hotspots can be open or secure. If a hotspot is open, then anyone with a WiFi card can access the hotspot. If it is secure, then the user needs to know a WEP key to connect. WEP stands for Wired Equivalent Privacy

WEP is an encryption system for the data that 802.11 sends through the air. Encryption system prevents any non-authorized party from reading or changing data. Specifically, it is the process of encoding bit stream in such a way that only the person (or computer) with the key (a digital sequence) can decode it.

WEP has two variations: 64-bit encryption (really 40-bit) and 128-bit encryption (really 104-bit). 40-bit encryption was the original standard but was found to be easily broken. 128-bit encryption is more secure and is what most people use if they enable WEP. For a casual user, any hotspot that is using WEP is inaccessible unless you know this WEP key.

If you are setting up a hotspot in your home, you may want to create and use a 128-bit WEP key to prevent the neighbors from casually eavesdropping on your network. Whether at home or on the road, you need to know the WEP key, and then enter it into the WiFi card's software, to gain access to the network.
WPA is a step up from WEP and is now part of the 802.11i wireless network security protocol. It uses temporal key integrity protocol encryption. As with WEP, WPA security involves signing on with a password. Most public hotspots are either open or use WPA or 128-bit WEP technology.
(MAC) address filtering is a little different from WEP or WPA. It doesn't use a password to authenticate users -- it uses a computer's physical hardware. Each computer has its own unique MAC address. MAC address filtering allows only machines with specific MAC addresses to access the network. You must specify which addresses are allowed when you set up your router. This method is very secure, but if you buy a new computer or if visitors to your home want to use your network, you'll need to add the new machines' MAC addresses to the list of approved addresses.