WEP is insecure, and should only be used if you've actually got devices that can't handle WPA.
That said, from the pics it seems this network is showing up on your MacBook, is it also appearing when you browse the network from your iMac?
The Network folder in the Finder often retains the server list from a Network you've previously connected to (which is fixed by a restart, or connecting to another network that actually has servers available). So, if you connect to a university network where others are connected with sharing enabled, you'll get a list of servers. If you go home and browse network servers, you might still see some of those that were present on the university server.