An ad-hoc network is a network where stations communicate only peer to peer (P2P). There is no base and no one gives permission to talk. This is accomplished using the Independent Basic Service Set (IBSS).
A peer-to-peer (P2P) allows wireless devices to directly communicate with each other. Wireless devices within range of each other can discover and communicate directly without involving central access points. This method is typically used by two computers so that they can connect to each other to form a network.
If a signal strength meter is used in this situation, it may not read the strength accurately and can be misleading, because it registers the strength of the strongest signal, which may be the closest computer.
802.11 specs define the physical layer (PHY) and MAC (Media Access Control) layers. However, unlike most other IEEE specs, 802.11 includes three alternative PHY standards: diffuse infrared operating at 1 Mbit/s in; frequency-hopping spread spectrum operating at 1 Mbit/s or 2 Mbit/s; and direct-sequence spread spectrum operating at 1 Mbit/s or 2 Mbit/s. A single 802.11 MAC standard is based on CSMA/CA (Carrier Sense Multiple Access with Collision Avoidance). The 802.11 specification includes provisions designed to minimize collisions. Because two mobile units may both be in range of a common access point, but not in range of each other. The 802.11 has two basic modes of operation: Ad hoc mode enables peer-to-peer transmission between mobile units. Infrastructure mode in which mobile units communicate through an access point that serves as a bridge to a wired network infrastructure is the more common wireless LAN application the one being covered. Since wireless communication uses a more open medium for communication in comparison to wired LANs, the 802.11 designers also included a shared-key encryption mechanism, called wired equivalent privacy (WEP), or Wi-Fi Protected Access, (WPA, WPA2) to secure wireless computer networks.
A bridge can be used to connect networks, typically of different types. A wireless Ethernet bridge allows the connection of devices on a wired Ethernet network to a wireless network. The bridge acts as the connection point to the Wireless LAN.
Wireless distribution system
When it is difficult to connect all of the access points in a network by wires, it is also possible to put up access points as repeaters.
This article from : http://en.wikipedia.org/wiki/Wireless_LAN