Password protection is a good thing to have on your router, and it's entirely possible that without having set up a password already, or at least changing/hiding your SSID, or providing some kind of encryption, someone might have already compromised your router.
Passwords, imo, for just home routers should be at least 16 characters, or 128-bit. It will be extremely difficult for someone to come by and get your password unless they REALLY REALLY want to get it. I choose to make my passwords more like passCODES, consisting of 4 symbols, 4 numbers, 4 uppercase letters, 4 lowercase letters, and if you go higher than 16 characters total, use a random amount of whatever you want. Mix it up! *iQ'Bc3H.2z~p7E4 isn't going to be easy for someone to get without a password cracker.
And, if you have a wireless router, which I'm guessing you do, make sure that you check the option requiring HTTPS to login to the router. So instead of http://192.168.1.1 it would be https://192.168.1.1 It's a little more secure. Every bit helps.
Go to a performance test site with just one computer, making sure no other computer is on, and you aren't running any P2P applications, and check your internet speeds. I like http://performance.toast.net for it's ease of use.
Not using any encryption will actually NOT slow your speeds down like any form of encryption will, obviously. If you want this, cool. If not, you might want to restart and implement what I mentioned above. Reset your router, run the install CD, and make sure you set up with WPA or WPA2, whatever your hardware supports.
Good luck!
