A friend of mine says that he has hacked local wireless router password and now he is using it... He is not giving me details of how he did that... Is it possible???
Yes its possible.
Dont the router have some internal firewall system???
And how such hacking can be prevented???
^ Use WPA instead of WEP for encryption. WEP is flawed and very easy to crack. WPA not so much.
^I read somewhere that using WEP can make your tasks easy as most of the devices connecting with the router can easily connect on WEP compared to other encryptions.
^ I'm not sure what you mean by making tasks 'easy', but I assure you that WPA is more secure compared to WEP and you will not experience any noticeable performance degradation using it. Also setting it up is trivial since you just have to choose WPA instead of WEP as the encryption protocol in your router software (assuming it provides the option), so that shouldn't be an issue. Chances are the OP only wants to connect computers to his router so he should not have any problems with compatibility.
^for example if we connect a printer through wifi. Most of the printers will support WEP but some devices might not get connected through WPA.
^ From Wikipedia (http://en.wikipedia.org/wiki/Wi-Fi_Protected_Access):
Certification began in September, 2004; from March 13, 2006, WPA2 certification is mandatory for all new devices to bear the Wi-Fi trademark.
So unless your wireless device is very old, you probably won't run into that problem. And anyways, you shouldn't be compromising security for the sake of using an ancient device. Anyone with a wireless card and a few choice freely available tools can crack WEP encryption.
Yes some old devices or probably old OS versions by default try to connect using WEP (I recall facing similar issue with an older laptop or some phone) , but as Sah said security should not be compromised for that.
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If you mean cracking the wireless security, you can use AirCrack. This software sniffs out wifi networks around you and you can try to crack the wireless password. WEP enctryption can be cracked in 2 minutes and WPA can be cracked with some work (1-10 hours) if the password is short otherwise it takes 100 to thousands of years if the password is long. WPA2 is almost impossible to crack (supercomputers would take thousands of years).