Relay-assisted network coding (NC) has attracted recent interests in increasing the transmission reliability and network throughput. By encoding the received packets from different source nodes, a relay node assists destinations to recover their desired information by forwarding the network coded packets. Previous work commonly assumes reliable inter-node channels and that relays always encode all the received packets to leverage the potential diversity and multiplexing gains. When channels are unreliable and unstable, for example, due to fading and propagation loss, the achievable benefit of NC diminishes and thus the traditional NC (namely, all received packets are encoded) becomes unsuitable for wireless networks. In this paper, a NC scheme is proposed, where multiple relays assist multiple source-destination pairs by adaptively performing selective decode-and-forward, NC, or remaining silent. When NC is possible, the relay always encode a pair of packets, selected according to the channel condition of the relay-destination link. Important performance metrics of the proposed scheme, including the average system outage probability and average goodput, are derived in closed form for independent and nonidentically distributed (i.n.i.d) slow Rayleigh fading channels. Numerical results show that the proposed scheme significantly reduces the system outage probability and improves the goodput of the relay-assisted wireless networks.