Network coding has been proposed as an alternative to the conventional store-and-forward routing paradigm for data delivery in networks. When deployed in a multi-rate wireless network, network coding has to interact with rate adaptation. When multicasting packets (a requirement of network coding) in a multi-rate IEEE 802.11 wireless network, one must use care when selecting the transmission rate to use. We refer to this problem as rate selection. We analyze the performance of network coding for a small set of scenarios representative of common topologies in a network that lead to coding opportunities. Based on this analysis, we present our Network Coding aware Rate Selection (NCRS) algorithm which takes into account transmission rates used for unicast links to all multicast targets. Simulation results show that in a multi-hop wireless network, network coding with NCRS achieves up to 24% more gain over routing than network coding with other rate selection algorithms.