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My question is: Are there any risks associated with tapping into a neighbor's internet access in this fashion? Financial? Legal? Privacy related? Virus related?
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Technically, it's theft. Not really any different than walking up to his house and hooking up a butt-set to make phone calls. I wouldn't worry too much about it though .. If you want to be a good neighbor you could tell him he needs to secure his wireless network.
Assuming your machine is configured properly and running virus protection, you are relatively safe.