It's only illegal if your neighbour doesn't know about it.
Before i got my free 20mb broadband modem I was using my next door neighbours wifi from their router to connect to the internet on my PC and Wii.
This isn't illegal as they said I could, same difference as 2 people in the same house sharing a router, except my share was next door.
But, yeah, if you steal wifi signal from someone without their permission then if you get caught then you can get in trouble.
So don't even think about taking your wireless enabled laptop out in the car and sit outside someones house browsing the web, thats just wrong, LOL
At the end of the day, if you don't want people stealing your signal then get some security on it or you are just inviting people in.