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An 802.11 access point (AP) advertises all data rates that it is capable of supporting. For example, an 802.11b AP might advertise 5.5 and 11 Mbps, while an 802.11g AP might advertise 54, 48, 36, 24, 18, 12, 11, 6, and 5.5 Mbps. APs with proprietary "turbo modes" can also support 108 Mbps, while 802.11n APs support many higher data rates.
During connection establishment, data rates are negotiated individually with each client. For example, an 802.11b client that connects to an 802.11g AP may start at 11 Mbps, while an 802.11g client that connects to that same AP may use 54 Mbps. However, these data rates are dynamic -- that is, automatically adjusted as needed to overcome packet loss caused by changes in distance and interference. This is like speaking more slowly and clearly when someone has trouble hearing you.
Clearly, data rates must be adjusted individually with each and every client, since some clients will be closer (and have a stronger signal) than others. However, the mere presence of slower clients can still have an adverse impact on the performance of other clients.
Thus far, we've been talking about unicast data rates applied to traffic sent to and from a single client. But what about broadcast packets sent to/from everyone on the WLAN? Those packets (and only those packets) must be sent at a data rate that everyone can understand. Broadcasts are usually sent at a slower rate like 2 Mbps so that even distant clients will be able to hear them.
APs must also use "protection" mechanisms to prevent collisions between old and new clients. Protection adds overhead -- longer headers and extra control frames -- which keeps the channel busier. Total WLAN throughput therefore drops when protection is turned on. Protection is required when there are older clients in the AP's vicinity, even if those clients do not associate to your AP. If protection were simply turned off, those older clients would just "talk over" newer clients, increasing collision rates and degrading performance even further.
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