Did some more reading and studying on the matter. Thought I would post this for anybody that is interested in long distance wifi.
First, I got my hands on a telescope to confirm a direct line of sight to my friends house. Surprisingly, even though I thought I had direct line of sight (looking a Google there were no big buildings in the way), there is a small 3 storey building in the way. Or more accurately my friends house is in a shallow valley.
No worries, with some careful measurements, I calculated a loss of about 25db for this lack of direct line of sight and I think I'm still within limits of being able to connect.
A great website I came across that can calculate all this stuff is here -
Finding the right radio was tricky. I looked at the USB wifi adapters however these things are all for Windows PCs. I wanted more diversity, something perhaps OS neutral. Most of my computers are Macs, then linux and I only have one Windows machine which is a laptop and I only use that to view video streams (when it's not updating Windows :P )
Power over ethernet radio was the logical choice. And I came across some nice options from a company called Ubiquiti Networks. In particular they have a nice radio called the Bullet.
Reasonably priced at $49 CAD for a 100mW radio. A little more for 800mW radio. The radio features a N type connector on one end and the ethernet connector on the other in a barrel shaped form factor. A segmented led display show the power levels so that comes in handy when aiming the antenna. This radio simply connects to any type antenna (biquad, helix, or dish)
Looking at the insides, the N connector solders directly to the board so there will be no losses in any cabling. So I should have very little loss.
Another thing that is nice about this radio is it is fully configurable, via a web browser interface, to be an access point, bridge, router, etc. It comes with a linux SDK for any custom work I want to do but I don't think I'll need to. It's also built from the ground up for long distance wifi, so you can easily adjust tricky items such as packet sizes and delays to wait for ACKs because of the distance with a simple 'distance to transmit slider' on the web interface.
I'm going to do a bit more reading a searching the web for as much info as possible, but I think I'll be ordering up a couple of these radios - unless I find something even better!
And I still can't make heads or tails of Industry Canada's limits on wifi transmissions, so I'll have to give them a call to find out what my legal unlicensed limit to transmit is.