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In the spirit of this question, I'd like to dig deeper into using multiple with the same for performance reasons.

As I understand it, if I have two devices on the same WAP, and one device can only communicate using 802.11g, then all devices are slowed to G speeds while that device is connected.

If this is true, is the following possible in order to maintain performance for all devices.

I'd like to set up THREE WAP's each with the exact same SSID, Encryption, and Passphrase. Each of the three WAP's would would differ as follows.

My question is, if I do this, will my N devices ALWAYS connect to N capable WAP's first (and prefer 5Ghz) if they're available? What about signal strength, does it come into play (ie: if the G WAP has a stronger signal, will an N device prefer it over an N WAP even though performance would be reduced)?

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AFAIK the speed of the networking is Point-to-Point. Being so, the communication speed is measured between the AP and the client, and not adjusted for all the clients connected to the AP.

And going deeper in your question, if you overlap the APs, they will generate interference among them and get the clients confused about which one is to be connected to.

You don't need to overlap, sit more than one AP in the same or almost the same spot. But you may use the APs to keep the Clients/AP Ration of ~10/1 and keep your throughput higher.