I am using psk2 perosnal
WEP is good - converts your password through a max of 128bit encryption key, which is represented by a hexadecimal key
WAP - is better than WEP, but I haven't had much experience with it and my router doesnt list that as a security option
I love it when people dont secure their wireless networks.
If I didnt have shared files on all my machines within my network and if i didnt download very much i would leave my network unsecured.
If you are running DHCP you limit the address pool to the number of machines you have - it is kind of a half ass way
Example:
you have 2 machines (one laptop and one desktop)
enable dhcp to 3 addresses (one address for each machine and one for the router) this limits addresses from being assigned to connected computers (rogue comps cant connect unless you have a machine that is shut off)
you can always disable the SSID broadcast (your network's name) so they wont turn up on another wireless machine
As for the torrent files, I would check to make sure the router isnt blocking the ports that the torrent program is using - should be able to look under the "preferences or config" setting on your torrent application
For the UPnP devices, assuming they are Plug n' Play, what are your trying to use? My router has a setting that i can disable or enable UPnP devices