What is going on when a computer appears in my Network without auth?

Can someone help me in understanding how or why someone's computer appears in Finder under Network. Normally, when I look under Network I see Severs and Library, now I am seeing some guy's name with his ibook below Severs. When I highlight it, the only option is connect. I have not tried connecting and I am unsure how this person's computer was added to my Network. It disappears when I restart the computer but appears again after a few hours. I am at home on a WEP encrypted WiFi network (netgear router Model WGT624 v2). I have not given the password to the WiFi to anyone. My firewall is on and I do not have any of the options checked to access the internet but network time. I was using frostwire to download a bittorrent at the same time and browsing the web on firefox.
Is someone connecting to my computer? Can they access my files? Can I tell what they accessed? How can I prevent this from happening now and in the future? Does this have to do with the bittorrent download? If so, are these unsafe ways to download files off the net?
I appreciate any advise or suggestions.
Thanks!

The only way that other computer could show up in your network is if your WEP password has been compromised or you don't really have your wireless router configured properly. None the less you are probably not in any danger of having your computer files stolen or looked at. Another user on your network would still need to login to your machine and would need your user password to do that. You would also have to have personal file sharing turned on. It is off by default.
I would recommend that you immediately change your wireless router settings to WPA or WPA2 for security, if your router supports the protocol. The WEP system was cracked years ago and is easily bypassed by special software. There was even a recent 60 Minutes segment that showed how easy it was to get into a WEP encrypted network. It turns out that banks and credit card companies are still using WEP even though they know, or should know, that it is no longer secure. Scary stuff actually.
If your router doesn't support WPA or WPA2 then get one that does. OS X Tiger supports both WPA and WPA2 out of the box and so do most Mac wireless cards in the last three years at least.
Message was edited by: lkrupp

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