The problem that I've found with Wifi and my Droid was with me phone, I could connect to a wireless router that was either open, running WEP, or WPA2. For some reason, if the access point was running WPA it would not connect. The other thing that it COULD be is the Droid's hardware may not be able to handle AES encryption for WPA/WPA2 networks. You could try changing your security to WPA with TKIP or WPA2 with AES or TKIP and see what happens.
Do what I do to ensure security with the ssid enabled or disabled use your mac address filter so you only allow the mac addys of the devices that you approve of.
Hmarc, I am using the droid with great success on a non-broadcast ssid. The droid picks the network up immediately. I have security turned off and use mac filtering for all connections. I am using a dlink wireless router.
I'm using a Netgear WNR834Bv2 - with the latest firmware update they ever had.
The only issue I've had is that every couple of days, I'll find the Droid connects...has the IP...thinks its connected, but when I go into the router admin pages and look at the connected device list, the Droid is absent. I've tried disconnecting and then reconnecting the phone. You can see the router give out the IP....and the it drops.
The only "solution" I found is that running on WPA2 AES works great for a day or so...and then for no reason, I've found that changing max speed to 54Mbps on the router "fixed" the problem. A day later...issue came back...changed back to 130Mbps..."fixed"....
It's an annoyance. I'm still within my 30 days of getting the phone. I wish there was easy to way to tell that the problem is with the phone over the router. I'd rather not swap the phone just to find I have the same problems. From the research I've done online I'm not the only one who's having the issue...so I don't know.