Yes I was using it for security. I thought this method was close to impossible to hack? In any case, I would use WPA2, but some devices like my PDA / phone won't accept the WPA2 settings for some reason.
No, sadly, MAC address filtering is trivial to hack, and not real security. A good percentage of WiFi devices on the market are MAC address programmable. As is the DGL-4500. It allows you to change the MAC address of device to match the MAC address of the PC if your ISP requires that, or you can just change it to eliminate conflicts in a network.
Some older devices aren't capable of supporting the higher demands made by WPA2. There is a less secure form of WPA, which uses TKIP instead of AES. I don't recommend using it, as theoretical attacks have already been shown to work against it to limited success, but it's certainly better than WEP. WEP is so broken that an attacker only needs a few minutes at most using the most aggressive hacking software to recover your WEP key/s and then it's game over.
Hope this helps,
Hank