In addition to what BitFlipper stated, most home routers provide channels 1 through 11. Each of those channels overlaps the channel on either side of it. So 1 and 2 overlap on the high side of 1 and low side of 2. 2 and 3 overlap on the high side of 2 and low side of 3. 3 and 4 overlap on the high side of 3 and low side of 4. ... etc.
The frequencies thrown out over the analog air are not nice clean entities. Signals change over distance and with other environmental effects. Receivers are tasked with filtering out the noise and letting in the signals that most accurately fit the channel.
@Bas: antennea explode ... that's funny. It isn't like the router is microwaving the phone or vice-versa. The power involved in the signals is not that high. It is just less optimal (i.e. prone to more wireless errors) when they are very close. If I had a megaphone (me router) and you did not (you phone) and we stand face to face and try to carry on a conversation we will be successful. However, you will need to work harder to discern what I'm blasting at you. I will probably have to repeat myself at various times throughout the converstation but eventually we will be successful. It is not "optimal" but it will work. When I back off a reasonable distance our conversation is more likely to be successful without as many repeats. Not to mention your receivers (ears) won't ring anymore.
Some more info. The lower the frequency the better the choice for an environment in which the singal needs to bounce. The higher the frequency the better the choice for an environment in which the signal needs to penetrate obstructions. Lower frequencies are better for shorter distances but a wider cone of coverage. Higher frequencies are better for longer distances and a shorter cone of coverage. Higher channels equate to higher frequencies (I believe that is the case for all signal ratings but correct me if I'm wrong someone).
NOTE: post a correction to anything I have stated wrong. My knowledge is learned from doing wireless surveys in the past and nothing from a formal school.
@Doctor WhoW3bbo: I think every electronic device emits some level of EMI (electro-magnetic interference). The degree of shielding and power involved will vary by device, manufacturer, etc. I had an old CRT monitor (way back) that would create a 3 foot wireless black hole across all 3 dimensions.