If I’m not the only person in the world using WEP, some of you might find this useful (I’d prefer to run a wide open network, but use WEP to keep random people from accidentally connecting to my network). I had a heck of a time typing in my password because the iPhone defaults to “WEP Password” mode. To make things more difficult, when the iPhone discovers a new network and asks for the password, I couldn’t find a way to switch modes from within the dialog.
So if it keeps rejecting your password, try something different: ignore the “Select a Wi-Fi Network dialog” and press the Home button. Next, go to Settings, choose Wi-Fi, and tap on your network name. Then you need to tap on “WEP Password”, and you’ll be able to choose “WEP hex or ASCII”. Once you’ve done that, click Enter Password to go back and type in your password. Click Join after you’ve typed your password, and you should be in!