Actually, the Kindle 3 can be password locked. I've never enabled that because I'm the only one (other than my husband) who has access. I trust the cute guy.
As for wifi issues, I have not had them with the Kobos but I did have an initial problem with the Kindle 3. I tried the password, I knew I was typing it correctly ... but no go. The solution above -- creating a manual connection -- fixed this and I've never had trouble since. Weird, but reasonably easy to solve.
And, yes, N is better but it's also backwards compatible with G and B (does anyone have a B?).