I have an 802.11b router. It's the slowest router you can get. It transfers at 11 megabits per second.
My cable internet transfers at 6 megabits per second, so therefore, I'm not losing any speed.
As far as things such as packet loss, yeah, they can happen. There are tons of safeguards in place, which slow the speed down as a result. Even so, I've played Mario Strikers online and had no troubles whatsoever. Same deal with playing my DS online.
The main weakness of wireless networking is when you want to stream media intra-network. 802.11b is nowhere near the level of speed you need, and for today's hi-def media, 802.11g isn't enough either. 802.11a might be, but a, as a standard, is pretty much dead. 802.11n does have the level of speed you need, but both the PS3 and the Wii max out at G (Wii could actually be b, I'm not sure, but I think it's g, not that the Wii is gonna stream your media anyway (yes, I know there's stuff on the Internet for that you can get to with the Internet channel, but come on))
The 11 is theoretical. You're getting less than that. Probably around 5 locally.