Well, to start with; don't use WEP and don't use a 5-character password. Not unless yours is the only secured network in your neighbourhood surrounded by softer targets. WPA and a c.20 character mix of symbols, numbers and letters is considered the sensible approach.
1) You may have better luck if you wait until you are prompted by this screen click here before entering any key. XP obfuscates all passwords by displaying a deliberately inaccurate number of dots.
2) No idea, I'm not a gamer.