According to the latest update in BackSpin by Mark Gibbs (Networkworld.com) the facts have become a bit clearer.

1) Mr. Peterson was sitting in his car near the cafe hotspot checking his mail during lunch.
2) The cafe's Wi-Fi service is NOT secured in any way.
3) The owner of the cafe had NOT complained previously to the police about this or any other infraction by anyone.
4) The owner of the cafe has since stated that she DOES NOT CARE if Peterson, or anyone else, used the service.
5) The owner of the cafe did NOT press charges.
6) The cop WAS responding to a complaint of "loitering" by a barber at the Varsity Barber Shop nearby.
7) There is NO "loitering" law, posted or otherwise, that will apply under these circumstances.
8) The issue of Wi-Fi use was not even in contention until the cop went trolling LATER to find justification for his questioning of a law abiding citizen.
9) Mr. Peterson either had NO LAWYER or a LOUSY lawyer.

End facts - begin rant:

The cop AND prosecutor involved here deserve to have their respective careers terminated immediately. If the good folks in Sparta don't do so, they'll eventually get more that they expect. I'm sure that the tendancy for law enforcement to play it fast and loose doesn't come about overnight. It starts a little here - a little there - pretty soon you're not ENFORCING the law - but you ARE the law. We in North Carolina have just terminated the Durham county prosecutor who had no regard for justice. But it was messy and a permanent scar on the community - not to mention damage to the reputations and lives of totally innocent people.

So before your Barney gets too far gone - better NIP IT!