If this is for a home network I would shy away from Cisco as its certainly overkill, high cost, and more time consuming to manage than a high end home router. If this is for a SOHO implementation I might still recommend a high end home router. But if you are going to need multiple APs for coverage and such then sure Cisco is the way to go.
Again, depending on your situation, the answer to your question changes. The bigger the implementation the more time and money you can spend on security. If this is a small implementation you can probably get away with AES and WPA2. The bigger you get you may want to look into WPA2 Enterprise with Certificates and a certificate server and possibly EAP-TLS. But unless you have a multi-floor office or medium size office needing 5-10 APs, I wouldn't even worry about LWAPP or CAPWAP.
If my answer sounds vague and generic it is because I know nothing about your implementation. If you would like more specifics than just reply back with more information.