I was trying to dig deeper into the Wireless Security Standards - WEP & WPA, when I read about 802.1x and I was blown by its widespread use and the research work put behind the framing of the standard.
WEP had many security flaws such as static preshared keys, which could be easily cracked. So Cisco came out with its interim solution for Wi-Fi security in its devices which used dynamic key exchange, a new encrption key for each packet and authentication using IEEE 802.1x.
Extensible Authentication Protocol (EAP) authentication is now used in WPA and WPA2 for 802.11.
IEEE 802.1x standard is simply a standard for passing EAP over a wired or wireless LAN. With 802.1x, you package EAP messages in Ethernet frames and don't use PPP. It's authentication and nothing more. That's desirable in situations in which the rest of PPP isn't needed, where you're using protocols other than TCP/IP, or where the overhead and complexity of using PPP is undesirable.
The three devices involved in the 802.1x authentication are the client, an authentication server and Wireless Access Point (WAP). The user or client that wants to be authenticated is called a supplicant. The actual server doing the authentication, typically a RADIUS server, is called the authentication server. And the device in between, such as a wireless access point, is called the authenticator. One of the key points of 802.1x is that the authenticator can be simple and dumb - all of the brains have to be in the supplicant and the authentication server. This makes 802.1x ideal for wireless access points, which are typically small and have little memory and processing power.