Connectify is the one application which allows us to convert Laptop/PC running Windows 7 into a WiFi HotSpot. However there are some limitations with Connectify. Firstly its beta version is free and final version won't be. Secondly it supports a limited number of Wireless Cards.
If your plans are long term, choose Virtual Router. For now its in beta and unlike Connectify, Virtual Router final version will be free. Apart from Windows 7 it also supports Windows Server 2008 R2. It uses WPA2 encryption and this application is purely written in C#.
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