Many factors affect the Wifi signal from wireless network equipment. The actual signal strength put out by the equipment is one, but other factors such as the size of the area you want to use the signal and environmental factors such as interference also play a role.
The relationship between WiFi signal and distance from the transmitter is a quadratic one. This means that if you double the distance from the transmitter, you decrease the signal by a factor of four, not two. Not surprisingly, the farther you are from the transmitter, the worse the signal gets.
WiFi was never designed for long distance use. It is great for home and home office applications and works well in cyber cafes and other so-called hot spots. The typical WiFi transmitter using either 802.11b or 802.11g technology is good for about 30-40 feet indoors and about 90-100 feet outdoors. Enough for most applications, but certain environmental conditions can drastically reduce these numbers.