pk, go grab the
http://www.boingo.com client. It will make it easy to scan for other networks..
When I set up Esa's wireless router, we had the same problem.. it turns out there was 3 Linksys wireless routers with the same default config in the same immediate area. And the other 2 both had default admin passwords..
I bet it's one of your neighbors that's screwing yours up. You could also try unplugging your own router (leave unplugged)... then try to connect with the laptop to see if your neighbors have any open access points.
I put ours on a different channel, setup the encryption and it works fine now. Plus we have a backup wireless connection!! ;)