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Quite right - if you need a WLAN, you need 802.11, not Bluetooth. But if you need a simple ad hoc connection with a colleague or two at a hotel, then Bluetooth will (eventually) be very low cost. Bluetooth will mainly be used for non-PC devices - PDAs, phones, household appliances, where it will often replace the current infra-red controls. Already, at Helsinki airport, Bluetooth-enabled phones allow checkin without waiting in line, so adoption of Bluetooth to replace infra red will lead to newapplications that are radio-specific.
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In my experience, your range of 500-1,000 feet is *way* off. That kind of range is only going to be possible in an area with no obstructions or interference.

Most people are putting WLANs into buildings. The rule of thumb I've heard from a couple of manufacturers is a 150-foot radius per access point, but even that is generous. Here are my real-world experiences:

In an old school building, the range is one wall. That's it. So if I put an access point in one room, then go into the next room, the signal is weak, but I can still get 5 Mbps. If I move one more room away, I get no signal.

My house is about 200 ft. from the school, with line of sight (through some trees). I put an access point in the school's window, and could get a marginal signal on the front porch, nothing inside the house. By putting range extender antennas in the window at both ends, I am able to get an acceptable signal (5Mbps).

Anyone considering a WLAN should buy two wireless NICs and test in your environment. I'm using Avaya Orinoco gear, and the software comes with a link test that show you signal strength, noise, and throughput.

Another small error is your access point cost. I think Avaya's low-end unit is down around $500.

Youshould also have mentioned that there is a limited number of clients per access point. Generally, if you get more than 30 PCs connecting to one access point, you'll see performance decreases.

You also neglected to mention that there are lots of other technologies using the same spectrum as 802.11, such as mobile phones, Bluetooth and microwave ovens. All these devices can interfere with each other. I've seen tests that show a single Bluetooth device cuts 802.11 throughput in half.

Oh, and the standard for 11 Mbps is 802.11b.
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