Tom, i agree with Laurence, make sure that the firewall is in place and shut off the DMZ capability unless you are using a lot of ports. If you do use the DMZ on a machine for some reason make sure that computer has a competent firewall software monitoring network activity.
The loss from the encryption in my experiences are minimal if any when the WEP is turned on. Try to put the router in a central location if possible relative to the computers of course and see what kind of signal you can get. That also depends on the type of material your house it made of concrete, wood, stone etc....will affect RF frequencies differently. If it's too weak you can always use a repeater unit which will boost signal if your house happens to be too big
laurence, i'd reccomend using something like AVG
http://www.grisoft.com It's free and it offers good protection without bogging your machine down like Norton does.