The folks at WI-FI PLANET posted tutorial on how to Use FreeRADIUS for Wi-Fi Authentication.
Wireless networks for businesses, including smaller ones, should always be protected with the enterprise mode of Wi-Fi Protected Access (WPA or WPA2). It provides stronger encryption to protect against Wi-Fi hackers. It also hides the encryption keys from your users, so they are more difficult to compromise, unlike the personal or pre-shared key (PSK) mode of WPA or WPA2, which distributes the encryption keys making it more vulnerable to cracking because users can simply reveal the keys, either for malicious purposes or unwittingly.
The enterprise version, however, requires the use of a RADIUS server. This server provides a way for the users to authenticate themselves, so they can access the network. Instead of having to input the encryption key, users log onto the network with a username and password. The actual keys are exchanged without the user even knowing and each user’s key is different and regularly updated.
Read the complete tutorial at WI-FI PLANET