Since WiFi is in the wide open, there are many reasons and causes for it to drop. As to the unknown devices, since I can spoof the MAC address you would never know if I connected to your network. There are many tools to do this now as well as, well, more.
The industry has done a poor job in many areas. Both the router quality is not that good (proof? Why else would they issue firmware updates?) and they don't explain that WiFi is not a sure connection.
We can improve our setups with a move to tighter security (noted at the top of this forum) such as router defaults then change the SSID (keep it simple) and then WPA2 AES personal but I find most owners are not ready to do that.
I have been using the same wireless setup in my home for over a year. We have a Belkin Surf wireless router and an Arris modem from Comcast, using cable internet from Comcast. In the house, we have 5 devices that are set up to automatically connect wirelessly: iPhone 4, an old iPod touch, a MacBook Pro, a Toshiba laptop, and a Brother printer. Until recently, there has never been a problem with connectivity.
Lately, certain devices have been losing connection. For example, last night my husband and I were both using our laptops with no problems. This morning, his is connected and my iPhone is connected, but my Mac is not (I get a timeout error and am not connected to the internet). Sometimes it's his laptop that drops the connection. Other times it's my son's iPod or my iPhone. It is never all of the devices at once (something is always connected), and each device always recognizes the network as existing yet cannot connect to it. The only way I've found to solve the problem is to unplug and restart the router.
I have also tried to change the channel that the router is set to, but that has not seemed to solve anything. The firmware is up to date. We are password protected in an area with few neighbors, and there never are any unknown devices connected when I check the client list for the router.