The biggest issue is that you're liable for whatever they do. If you're comfortable taking that risk on, move to the technical issues. You will be sharing bandwidth, but with cable you're sharing it anyway. If you are capped, they will be a part of your cap - if they stream a lot of media or anything like that, it'll "count" against you.

As for protecting yourself, I like the idea of the "guest" network. If they are on the same wireless network, they are on your local network. Not just access to your data, but if they did get infected with a virus, it would suck if it was spread to you. Local firewalls will definitely help that, and not sharing public files, always use passwords. The guest network just adds that extra layer of protection, separating them from you. Great compromise.

If I knew my neighbors fairly well and it fit all of the above conditions, I'd probably share, especially if it weren't permanent. I would use a secondary network, though. Basically, I'll only let people on my network that I'd let stay in my house, friends and fam. (Even then, if I had a guest network, I might just use that!)