A dynamic rate selection technique is presented as a way to enhance the performance of ad-hoc networks. In particular, for IEEE 802.11-based networks using rate adaptation, the PHY scheme can vary and each IEEE 802.11 standard has different channel coding and modulations. The work proposes that the transmission rate should be chosen in an adaptive manner since the wireless channel condition varies over time due to such factors as channel characteristics, the PHY scheme selected, time-varying interference, and the priority of services (QoS demands) from MAC/PHY layers. Excessive high speed transmission can result in increased Frame error Rate (FER) over the link resulting in reduced throughput. This paper considers a new approach to alleviating FER by dynamically adjusting the transmission rate according to the Quality of Service (QoS) requirements from applications. Results are presented that show how this scheme achieves much higher throughput and lower end-to-end delay compared to the current IEEE 802.11 a/b/g ad-hoc networks. The results also show that the stability of the system is improved when operating under the QoS mechanisms supported in IEEE 802.11e MAC protocol.