I don't recall the exact settings in OS2006, but the symptoms you get are the same I see if something's wrong with DHCP... I remember only 3 weeks ago I connected to a router that was supposed to handle everything via DHCP but failed to distribute a gateway- and DNS-address.

Setting these values manually solved the problem for me.

(It could be the other way round, that you have invalid manual values and should switch back to DHCP.)

I also remember that when I owned a 770, I once had to delete saved access points and start over because some settings got messed up. Do you try to connect to the same few networks? Networks already saved?