Both are vulnerable to unauthorized use and eavesdropping, but there's an important difference. Wireless LANs can be tapped passively, without physical access or sophisticated equipment. All an attacker needs is an inexpensive wireless NIC and a tiny bit of know-how. WEP was designed to provide confidentiality for 802.11 networks, similar to that of wired networks. Wireless access points and stations exchange management frames to associate with each other.
Stations also transmit probe frames to find access points.
When a station find an access point, it initiates an association and proposes an authentication method. The default method, Open System Authentication, actually provides no authentication at all. If the station proposes Shared Key Authentication, the AP generates a random 128-bit challenge. The AP decrypts the challenge, using a CRC to verify its integrity. If the decrypted frame matches the original challenge, the station is considered authentic.