I know it is not the point of your post, but you only answered the WiFi legality part of the question, but that does not make it legal or ok to give away the WiFi signal outside of one's home. Of course I have not read his contract with his ISP, but 99.99% of them will forbade such... having permission from the homeowner doesn't matter. But it is good enough for you to have your conscience clear, you are doing nothing wrong as long as you have permission!

So... I forgot to post the link to our WiFi FAQs... Main Page - BlackBerryFAQ

Good luck. Ask back if you have a specific question, please.