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Mac Filtering is ok... As long as you understand what it does.
MAC Filtering tells the router that unless the packets are coming from a specific MAC address, do not forward them. So it provides some protection against the problem number 2 that I highlighted (someone jumping onto your network) but provides no protection against someone reading what is going on with your network.
And it's very simple to get around.
I would consider:
WPA-PSK
or
WEP
or if you don't want to encrypt your network (for some reason)
MAC Filtering and SSID Disable
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Always read stuff that will make you look good if you die in the middle of it.
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