Wii wireless issue....Follow

Consoles are just computers right.

So we got the kids a Wii for xmas. Yay! Worked fine at first then I tried to connect to my WiFi. It connected fine, ran the connection test. No problems. Tried to update. Didn't need any. OK, ready for fun.
After this point the system would freeze on any channel I picked. Black screen, no response. I would have to power down from the console. only to get back to the same problem. I cleared the wifi info and it still happened one more time. then after a power cycle I could play a game just fine. I've just reconnected and I'm having the same problems. Anyone experiences this? Please help.
I'm running a 2701HG-G Gateway Modem. using Wep(I know I know) using 802.11b/g broadcasting at 2412 Mhz.

yeah, is borken.

yes, really...

Maybe it was a returned product that someone tried to mod and semi-bricked instead?

I've received returned goods from Amazon before. I remember when I was a kid my parents purchased the FF Anthology game (I think it was the one with IV and V) for the PSOne. I was really excited, and opened it, there was no plastic on the jewel case. Opened it up and there was only one CD in there, and it was either a Demo or Sound Track CD, not the game CDs. Returned it for a replacement the next day. Apparently they would mix returned items back into the shipping stock without actually checking the product returned.