WEP gives you some protection, MAC address list gives you some more protection, but neither completely protects you. Using both of them is better than using only one.
The reason the MAC address list is not safe is because there is an app for AirPort Extreme that allows you to change your MAC address, so somebody could figure out the MAC address of your computer, change their MAC address to match it, and then they can connect. A program called kismet, or KisMac (Mac version) shows all of the wifi routers nearby and all of the MAC ADDRESSES of the devices connected to it. And if it's WEP, it will even crack the WEP password for you automatically. That's how easy it is to hack wifi. You can watch people do it on YouTube and you can try it yourself.
There is no crack for WPA out there. I would advise you not to use wifi for an internet connection unless you turn on WPA protection, even though that's not compatible with your PowerBook. It's cool but it just isn't worth it.