Few possible causes:
1. Signal attenuation. Do you have any other wireless devices broadcasting in the area? Any powered antennas?
2. Security issue. If you're using XP to manage your wireless settings, you may need to remove the stored profile for that wireless network, and start from scratch. I've noticed that on my wireless network I get that same behavior when I've connected to the router but not authenticated. The signal repeatedly connects and disconnects, never allowing packet transfer.
3. The wireless transmitter in your router is failing. This happened to one of my Belkin units recently, and it needed to be replaced. It would 'sieze up' from time to time, requiring a reboot.
I use a wireless laptop at work and travel between multiple locations, each with different wireless settings, using static IP addressing. If you need further help, PM me and I'll see what I can do for you.