Do you ever sign in to your neighbor's wireless internet?

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I catch myself using my neighbor's wireless internet all the time. 1. Is this legal? 2. Can someone actually see what you are doing online? I know that it says when you sign on that it is not encrypted, etc. 3. Why would we just not all get 1 or 2 wireless networks on the block, and all the neighbors could use it... Anybody that could help me out on this one would be great. THanks