I was having this problem (downloading 1kb) on the internet connection I am using, however I am on a 770 with 2008HE. This doesn't like having manual DNS settings entered into the Connection dialog (it always fails to connect). Instead you have to connect to the Access Point as normal then enter the DNS settings manually into /etc/resolv.conf via xterm and root.
i.e. if you wanted to add the OpenDNS settings:

echo nameserver 208.67.222.222 > /etc/resolv.conf

Just thought I'd add this here in case anyone else using 2008HE gets this problem, or wants to add manual DNS settings.