WEP stands for Wired Equivalent Privacy. It is a security standard that defines how to encrypt data as it travels across wireless networks.

• Wireless networks broadcast messages using radio and are thus more susceptible to eavesdropping than wired networks.
  
• When introduced in 1999, WEP was intended to provide confidentiality comparable to that of a traditional wired networks. WEP supports both 40-bit and 128-bit encryption.
  
• WEP is often the first security choice presented to users by router configuration tools even though it provides a level of security that deters only unintentional use, leaving the network vulnerable to deliberate compromise.

WPA stands for WiFi Protected Access. It is a security standard that improves the WEP protocol by authenticating network users and providing more advanced encryption techniques.

• WPA is the protocol used with 802.11g and 802.11i networking standards.
• WPA resolves the issue of WEP and provides a way of insuring the integrity of the messages passed through enhanced data encryption.
  
• WPA operates in either WPA-PSK mode (aka Pre-Shared Key or WPA-Personal)
• In the Personal mode, a pre-shared key or passphrase is used for authentication
• To upgrade your wireless security to WPA, you must have three critical components:
• an access point (AP) or wireless router that has WPA support;
• a wireless network card that has WPA drivers available;
• a client that supports WPA and your operating system.
• Advantages of WPA
• Provides extremely strong wireless security for the 2003 computing environment.
• Adds authentication to WEP's basic encryption.
• Has backward compatible WEP support for devices that are not upgraded.
• Disadvantages of WPA
• Except when using with the preshared key (WPA-PSK), complicated setup is required, unsuitable for typical home users.
• Older firmware usually will not be upgraded to support it.
• Incompatible with older operating systems such as Windows 95.
• Greater performance overhead than WEP.
• Remains vulnerable to Denial of Service attacks.

• This method uses a passphrase (also called a shared secret) that must be entered in both the wireless access point/router and the WPA clients.
• This shared secret can technically be between 8 and 63 characters and can include special characters and spaces.
• Uses the 802.11i network standard.
  

Sources:

http://www.microsoft.com/windowsxp/using/networking/expert/bowman_03july28.mspx
Discovering Computers 2007 A Gateway To Information, Shelly, Cashman, Vermatt, Thomson Course Technology
http://en.wikipedia.org/wiki/Wi-Fi_Protected_Access
http://www.pcmag.com/article2/0,4149,1277020,00.asp