I've been trying for quite a while, but not really hard enough, to set up my Powerbook to use WPA instead of WEP for its wi-fi connection. I finally got it working!
1. Enable ESSID Broadcast on your wireless modem. Restrict the clients that can connect to your network by setting up a list of allowed MAC addresses.
On the modem's Wireless settings, the "ESSID Broadcast" field must be set to "Enable". I found that whenever this was Disabled, I would get the error on my Powerbook when I tried to create a new Network entry:
"The wireless network [network name] does not support the requested encryption method."
This error occurs even if I entered the correct WPA key.
If you really want to turn ESSID Broadcast off, you can still do so by first connecting from your Powerbook while ESSID Broadcast is enabled. Then after that, you can go into your modem's settings and set it back to Disabled.
However, if you turn Airport off, or lose the connection to the network, you won't be able to go back unless you re-enable ESSID Broadcast.
A better way of ensuring no one else connects to your wireless network is to set up a list of allowed clients. In my modem, I went into Wireless Client Filter settings and put in the MAC address of my Powerbook's Airport card. Set the "Filter Action" to "Allowed".
In OS X, you get this value by using Network Utility. Click on the Info tab, then copy the values listed in the Hardware Address field.
Note that my modem is a Billion - BIPAC-743GE. I don't know if this fault/feature is specific to Billion modems or my model. For any other modems, YMMV.
2. On your Powerbook, ,make sure you WPA key is in ASCII and is 63 characters long
I'd previously tried creating Network entry using a shorter WPA key and it didn't work. I kept getting a message "There was an error joining the Airport Network [network name]"
(2.5 hours later)
Shit. I went into my modem settings and tested the above statement, and entered a shorter phrase for testing. I then entered the same values in my Powerbook. Tried to connect and it failed.
I then entered the original values in the modem, saved the settings, then restarted it. Did the same on the Powerbook, changing the password in KeyChain. Didn't work. Network Utility crashed continuously. Re-entered the values a couple of times. No dice.
Then I connected the Powerbook via Ethernet cable, and turned Airport off. Browsed a few pages. I disconnected the cable, then turned Airport back on. It was working, and selected the default network that I had set up.
So what was the actual problem? I have no idea. Maybe some magic gremlin in OS X feels happier when it detects an internet connection via Ethernet, then decides to let WPA work. Aaaargh!
I could have saved two and a half hours of my life by just disabling security or going back to using WEP, since I'd already restricted the wireless clients anyway.