Providing passwords to multiple users on a wi-fi network

Solution 1:

RADIUS is supported by a lot of wireless hardware providers, even the cheep ones. You will need to set up a RADIUS server on your network, but once it is set up people will be able to log on to the wireless using a username and password.

... giving each individual user a password that they already use for other applications in the say local network?

If that means you want to know if the users can use their Domain Login to connect to the wireless (assuming you are using a windows domain) then yes.

Here is a set of tutorials setting up radius with a Linksys router. Part 1, Part 2, Part 3 (Never posted)

Here is another tutorial that includes the setting up to use the domain for authentication.

There are other providers of RADIUS servers, if you do not have Win2k Advanced Server or newer, but I do not have any links for them.

Solution 2:

You could use a server with WiFi billing software installed. The server has dual Network Interface Cards, one connected to the wireless Access Point, and the other to the router/internet. The software bridges the data between the two NICs.

On logging in to the AP, the user is directed to a page, where they can buy internet access. OR, you can print out vouchers with access information for each user. Unfortunately, you can't assign a password for each user with this method.

A bit convoluted, but each user has their own password to access the internet from now on. Try here for more information