Wireless Security

Until a couple of year's ago I worked in IT Infrastructure in a Global Investment Bank. I had a request from a small new branch office in Serbia for me to allow their office LAN to be connected to the corporate network via a WAN link. It had:

Unencrypted WiFi LAN connecting 5 PC's;
Technology was supported by a local PC company;
Standard retail XP build on the PC's;
No local firewall.

The local manager thought I was being obstructive in refusing the connection!!

Anyone else had a similar nightmare?