Mine does that occasonally, it will work fine, and then stop seeing Wifi connections, but for me all I have to do is shut it off, and turn it back on. (I am on Os2007HE)
Could be a firmware corruption? I do know that OS2006 And OS2005 shut the wifi module down when you slide the cover over the screen....
dunno, how long did you try 2007HE for? Long enough to go through a power cycle or two?
-ezra