Personally I would recommend against sharing. For the reasons already mentioned by the others here (99.99% likely against your T&C with the ISP, liability issues, etc) but also for the fact of how did he know you had wireless in the 1st place? Did you invite him in once and he saw your router on the desk or does he already know about the wireless network because it came up on his PC when he turned it on? If it's the first then not too scary but if it's the second... has he already used the connection and realized you may have looked at the DHCP log and saw a new IP so he decided to "ask" to use it? All kinds of other issues to think about as well. How well secured are the other machines on the network? In addition to running a packet sniffer to read your traffic he could also break into the systems given enough time and he'd have plenty of it. Why does he "need" internet connectivity that he's not willing to pay full price for his own and not have to share.

Okay so I paint an ugly paranoid picture, it's what I have to do every day. But the facts are, unless you know and trust the guy you are opening yourself and the others in your network (i'm assuming they're roomates) to indetity theft, bandwidth hogging, viruses, etc. Whether you decide to allow it or not make sure that you secure your router. Go here:

http://www.dslreports.com/faq/wifisecurity

for a run down on how to do so.