WEP utilizes a data encryption scheme called RC4 with a combination of user- and system-generated key values. The original implementations of WEP supported encryption keys of length 40 bits and 24 additional bits of system-generated data (64 bits total). In an attempt to increase protection, these encryption methods were extended to support longer keys including 104-bit (128 bits of total data), 152-bit and 256-bit.
When communicating over a Wi-Fi connection, the protocol encrypts the data stream using these keys so that it is no longer human readable but still can be processed by receiving devices. The keys themselves are not sent over the network but rather are generally stored on the wireless network adapter or in the Windows Registry.
WEP represents just one element of an overall wireless network security strategy.
→ See also - Introduction to Wi-Fi Network Security