I've heard of that, the hacker was doing as an experiment to demonstrate to people how insecure their systems were.
I suggested changing the Router's IP address as one more means of slowing the person down. A dedicated hacker will break down any defense you put up, but instead of your system falling to the hacker in 10 minutes, we can turn it into a few days.
Of course, the best security for a wireless system is to not use wireless
Edit- Forgot to add, if your router allows it, reduce the transmitter power. My router doesn't have that ability, but I know some do. If your router does you can limit it's broadcast range down to a 20-30 feet or so. A linksys WRT54GS, for example, has an effective range of about 150 feet or so which is far too large for the average home.