We all knew WEP was not terribly secure. Now there is proof it is nearly worthless in the face of a skilled attack.
Even so; I still recommend WEP with a 128 bit key (up from my past recommendation of a 64 bit key) for home users. In addition, I tell folks to run an intrusion detection utility. eEye Digital Security's "Blink" intrusion detection is available free in a home version for Windows XP and Vista and I have been testing that. (No results to report, yet. But I will say that you are going to have some fun getting it to run in the presence of an anti-virus program, hence the long test period.)
If you have sensitive data, use WPA1 or 2. (2 is preferable.) Better yet, encrypt your data and forget about wireless entirely.