Classic example of a failing consumer wireless access point. They all seem to do the same thing: slows to a crawl, reassociating temporarily fixes the problem, and problems associating. The culprit is usually overheating. To save a few cents per unit, there's no heatsink in the darned things (they barely need one, anyway, but for reliability they should have one).
Replace it, and keep the new one reasonably cool.
Commercial grade gear won't usually do this, but then the AP will cost you several times what a cheap Linksys does and will probably be harder to set up as it will lack the "instaconfig" handholding modes that the consumer ones have, but then again it'll also do a lot more if you want it to.
That said, how many other networks are in your area? What channels are they on? There are actually only 3 independent 2.4GHz 802.11 channels: 1, 6, and 11 (and 12, if your devices can pull it off within the FCC's limits, which most can't).
And this, ladies and gentlemen, is why I use wired networks whenever possible. They're faster, too
