Reading of all the connectivity problems, I wonder if the thing I have is maybe not related to my router (as I thought it was) but to the Nokia 770 instead:

I have no problem connecting for the first time, and the connection does not drop while I'm online. I never had this. Not once.

But:
When I disconnect/turn off the unit and re-connect later, I never get past this blinking "W" at the top. It blinks forever, I usually make it go "offline" again manually (although sometimes, I cant even do this. It just ignores my click and blinks on.)

Solution: Either switch off the router and switch it on again or set the router to "WLAN>disabled" and then to "WLAN>enabled". The next connection will work. Usually.

Because of the workaround involving manipulation on the router, I thought the router caused the problem. Now I'm no longer sure. Can it be that the very problem you're describing here has some side effect that causes an WLAN-connection not to be closed properly, thus leaving the router in some undefined state that prevents it from re-connecting?

And: Does anyone else have a problem reconnecting?