That, and other equipment working in the 2.4GHz frequency range (there are plenty, ranging from microwave ovens to wireless keyboards to movement detecting radars).

It might be an incompatibility between your AP and the N900. Some APs just don't do the power saving stuff correctly, and the N900 isn't completely free of issues itself.

Before trashing you AP though, I'd try if the setup works different in another location, as it sounds like your current environment might have quite a lot of radio noise. Does it matter how close to your AP you are? Do you have transmit power on the N900 set to 100mW? Also try if you can find people with same/similar AP and ask for their experiences.

Very high (1000ms+) ping times (and breakups in non-TCP traffic) point towards dropped ARP packets (as compared to dropped ICMP echo packets, which would show as packet loss). ARP request/response wait is the reason why the first ping time is higher than the subsequent pings (this is best observable with wired ethernet, where ping times are more stable). Do you get a lot of packet loss with ping?