The Nintendo Wi-Fi Network Adapter has three modes on the back: "Router", "Bridge" and "Auto". The “Router” allows the device to act as a normal router while the "Bridge" setting connects to another router and then communicates with the Nintendo DS and Wii. "Auto" apparently can automatically switch the household's network over automatically.
The wireless router (AKA Nintendo Wi-Fi Network Adapter") will go on sale on September 18th in Japan first for around $53 USD. The unique feature of this device is that it can operate in WEP and WPA mode at the same time. This would allow both DS and Wii to run simultaneously using different encryption schemes.