WiFi is a marketing phrase that is short for wireless fidelity. It compliments the over geekafied moniker IEEE 802.11x, where x is a,b, or g. When you sit down at a networked desktop computer it is connected by a network cable to a hub, router, or switch. The computer's network interface card sends zeros and ones down the cable by changing the voltage on the wires from +5 volts to -5 volts in a prearranged cadence.

WiFi simply replaces these cables with small low powered two way radios. Instead of changing voltage on a wire it encodes the zeros and ones by laying an alternating radio signal over a constant existing signal, again in a prearranged cadence. The alternating signal encodes zeroes and ones on the radio waves. This is an over simplification, but you get the idea.

The 802.11b specification allows for the wireless transmission of approximately 11 Mbps of raw data at distances from several dozen to several hundred feet over the 2.4 GHz unlicensed band. The distance depends on impediments, materials, and line of sight.