WDS Linked Router Network

Introduction

WDS (Wireless Distribution Service) creates a wireless backbone link between multiple access points that are part of the same wireless network. This allows a wireless network to be expanded using multiple access points without the need for a wired backbone to link them, as is traditionally required. The WDS-enabled access points can accept wireless clients (e.g. wireless laptop users) just as traditional APs would.
Also take note of the fact that all repeaters, including this WDS Repeater mode, will sacrifice half of the bandwidth available from the primary router for clients wirelessly connected to the repeater. This is a result of the repeater taking turns talking to not just one partner, but to two, and having to relay the traffic between them. As long as your bandwidth requirements are within this halved bandwidth amount there will be little or no reduction in "speed".

Important Note:
Be aware that WDS is NOT a certified standard of the IEEE and that every vendor that provides WDS is doing so via its own implementation. In general, this results in incompatibility between different HW vendors devices e.g. Ralink, Atheros, Broadcom. In other words, this result in much trouble connecting units, even of the same OEM, when they use different HW. So, this is not a bug in DD-WRT. Its just a design problem and we're not responsible for it.

Alternatives:
If your needs are not specifically tied to WDS, another way to wirelessly link two routers is by setting up the repeater in either Client Mode or as a Client Bridge. You may even find that these set-ups increase speed compared to a WDS. You can read more about these in the sections Wlan Repeater and Repeating Mode Comparisons.
Atheros Based Devices and WIFI cards
There is not much to know. just a few facts to follow since it works different from other WDS stuff!

General FAQ
WDS between different chip vendors (atheros, broadcom, ralink) will not work most of the time since it's INCOMPATIBLE and no we will NOT fix it
. (However, if you are really desperate to give it a try, users in the forum have documented that this may work for certain hardware. Try at the peril of your sanity.)
A WDS Station will not work as a wireless access point out of the box, i.e. won't allow clients to connect to the repeated signal. This is not possible with Atheros chips. A solution is to have clients connect either to the WDS station's wired RJ45 port, or to set up a Virtual Access Point (see more under Multiple WLANs).
Don't set MACs to the WDS-Table. This always causes trouble so stay away from it. It won't work.

DD-WRT to DD-WRT WDS
Only set the ap to "wds ap" and the clients to "wds station". Put all on the same SSID and set your prefered wireless encryption.
NO WDS support for connecting current DD-WRT MadWIFI <-> DD-WRT MadWIFI-N
Under Basic Setup ---> Network Setup ----> Local IP Address, use an IP in the same subnet as the WDS AP router but outside the WDS AP router's DHCP range.
Disable DHCP server on the WDS STATION.
Important Write down the WDS AP's IP as the gateway and DNS on the WDS STATION.
Save and Apply Settings

Note by Victor (2012.03.30):
The above setting did not work on my TP-LINK WR741ND V2.4 (CPU: Atheros AR7240 rev 1.2 (0x00c2) ). I figured out a similiar way like Broadcom chipset.
Here is procedure:

Router #1 (Access Point to Internet), I am using DD-WRT v24-sp2 (11/21/10) std-build 15778, the version recommended by Router Database.
Do a 30-30-30 reset.
Change password, enable WAN port. Use same default IP 192.168.1.1.
Config Wireless mode to "AP", Wirless Network Mode to "G-Only", Channel Width to "Full (20MHz)", Wireless Channel to "4 - 2427 MHz" (don't know why, it does not work if I changed to Channel 2), SSID to anything you want, Broadcast to "Enable".
Config Wireless security to WEP, 64-bit, 10 digit KEY 1.
Config WDS node with "LAN", MAC address of Router #2, name of Router #2 (anything you want).
Verify above settings, verify you can get on Internet from this router.

Router #2 (WDS Client), I am using DD-WRT v24-sp2 (11/21/10) std-build 15778, the version recommended by Router Database.
Do a 30-30-30 reset.
Change password. Change IP to 192.168.1.2, mask 255.255.255.0, Gateway 192.168.1.1, DNS 192.168.1.1.
Disable DHCP server.
Config Wireless mode to "AP", Wirless Network Mode to "G-Only", Channel Width to "Full (20MHz)", Wireless Channel to "4 - 2427 MHz" , SSID to same ID with #1, Broadcast to "Enable".
Config Wireless security to WEP, 64-bit, same key code to Router #1.
Under "Wireless" tab and "WDS" tab, config WDS node with "LAN", MAC address of Router #1, name of Router #1.
Save and apply settings. Reboot router. Then you will be able to PING 192.168.1.1.

Here is Result:
Routers can SEE each other as a client under Wireless Status page, but not a WDS node.
Computers hooked to each router via Ethernet cable can talk to each other.
Strange part: my iPhone can hook to Router #2 and get on Internet via Router #1, I believe Router #2 is acting as a repeater/bridge. But my DELL laptop will not connect to Router #2, it only can connect to router #1 directly. It seems my laptop can not "see" router #2. My Asus EB1007 netbook can connect to Router #2, using it as repeater.
System has been running several days with no issue. Although WEP is not secure, you can use MAC filtering to tighten security.
END note by Victor

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