Ok. Wireless seems to be working...

What I did :

Installed the latest 1.4.2.0 drivers with utilities from RAlink. Use WZC for configuration (lets MS handle it)

This by itself did not work, so on we go...

On the router itself, for some reason I had locked it to channel 7. It seemed like a good idea at the time. I set it back to automatic. I also disabled 'Short GI', because it said it might cause interference with some wireless signals.

I really don't know which change corrected the situation.

Oh yeah, it's on a DIR-655 router. Lovely piece of tech. :)