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There are SD cards with WiFi support
(upload.wikimedia.org)
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So what does it do, exactly? Can it act like a NIC or something?
Acts as access point, if you connect to it from another device you get access to stuff on the SD card (via app or built-in webserver)... at least in theory. Quality varies.
Most of them act(ed) like an access point.
However, the SDIO spec allows for cursed applications like WiFi adapters, Bluetooth dongles, and more to be fitted into an SD card. It was really just SPI, so in theory it also allowed things like GPS tranceivers and any other peripheral you can think of that's low bandwidth enough to work over SPI. Need Bluetooth for your Palm PDA? Here you go! Just stick a massive slab of plastic into the SD card slot!
These days SDIO is only really used for alternative (faster) transfer modes and maybe some slow and insecure WiFi access points in cameras.
Mine acted like a wifi card. I could connect to wifi networks with it.
Worked for shit, but it did work... Just enough.