I am planning on using openwrt. Unfortunatelly the wiki is not particularly helpful.

How do I setup the wlan interface for WPA2 PSK? I got as far as /etc/config/wireless, but there are no examples for anything other than option encryption none.

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See the OpenWRT manual on wireless settings. There are two types of wireless settings: device settings, and interface settings. Encryption is part of the interface settings; below is the format and possible options for the section in /etc/config/wireless.

You may want to look into adding a web configuration for OpenWRT and handling encryption setup there; it will very likely be simpler. X-WRT is one I've used for years on my OpenWRT router, and it's been quite capable. I haven't used recent versions, however, so YMMV.

  config wifi-iface
      option network  <the interface you want wifi to bridge with>
      option device   wifi0, wifi1, wifi2, wifiN
      option mode     ap, sta, adhoc, monitor, or wds
      option txpower  (deprecated) <transmission power in dBm>
      option ssid     <ssid name>
      option bssid    <bssid address>
      option encryption none, wep, psk, psk2, wpa, wpa2
      option key      <encryption key>
      option key1     <key 1>
      option key2     <key 2>
      option key3     <key 3>
      option key4     <key 4>
      option server   <ip address>
      option port     <port>
      option hidden   0,1
      option isolate  0,1
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As far as I can tell, openwrt is not really designed for end users who don't have a thorough knowledge of networking. It's more for networking people who want to use it as a base to build products for end users. At least, that's the feeing I got when I tried it out, and from reading through their docs. Perhaps that has changed since.

You might be better off with something like DD-WRT or Tomato, or other third-party firmwares that come with web interfaces.

Edit: On the other hand, I just ran across X-wrt, whose tagline is "OpenWrt for end users." It's a web interface for OpenWrt, and I think I might give it a try.

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jinx! (on x-wrt if nothing else...) now you owe me a coke, so we're even. – quack quixote Nov 1 '09 at 23:10
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I use the command wifi. First log in to OpenWrt and use wifi detect to create a template

mv /etc/config/wireless /etc/config/wireless.backup
wifi detect > /etc/config/wireless

Now use vi to enable the radio, change SSID, and add encryption and key

config wifi-device  radio0
        option type     mac80211
        option channel  11

           ... skip several lines

        list ht_capab   DSSS_CCK-40
        # option disabled 1    # Not commented out in template

config wifi-iface
        option device   radio0
        option network  lan
        option mode     ap
        option ssid     Your_ssid     # Originally OpenWrt
        option encryption psk2        # not in template. This selects WPA2 PSK
        option key      Your_key      # not in template

Now save the config file and restart network.

/etc/init.d/network restart
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