Traffic characterization studies have been performed on wireless LANs to characterize signal to noise ratios, frame and packet error rates, error correlations, throughput, delay and delay variation. While users utilize these studies to achieve better network and application performance, researchers have used them to design new protocols and in simulation and analytical works. However, these studies have mainly focused on lower layer issues and have not been updated with the latest technologies available in the market. In this paper we use an experimental approach to address these issues. We include a thorough traffic characterization study at the network and application layers of MPEG-4 traffic over IEEE 802.11b wireless LANs (WLANs). Using two freely available tools to send and receive real-time streams and collect and analyze traces, we characterize the errors at the IP level and the effect of those errors on the quality of the movie under different conditions such as varying the distance from the access point (signal quality), the packet size, the quality of the movie, and the network load. At the network level, the Error Length and Error Free Length distributions show that performance deteriorates with the increase of the packet size, distance from the access point, and network load. We also found that NITUs of 1000 bytes offer the best compromise, errors occur in bursts and most of the time affecting less than 5 packets, and that a mean error burst of 2 packets seems to be appropriate for modeling several scenarios. In addition, we found that the distribution of the error length and error-free length in number of packets is similar to those found in the former 2 Mbps wireless LAN. At the application level, we found that I frames present the highest frame error rate but at the same time are the least affected in terms of number of bytes.