EAP and RADIUS servers

I’m currently running a WIN 2K IAS server with 802.1x over PEAP and here’s the thing. When my access point is set for WEP Encryption everything works fine. Login window pops up, user is authenticated by the RADIUS server if login password check out access is granted. Although everyone knows how great WEP is…
Going by that train of though I figured EAP would be much more secure. The strange part is when EAP is turned on as the Encryption method I never get a login window. It’s like anyone can login and the RADIUS server is never contacted with the credential check.

Anyone have a clue what the problem could be?