I set up my wireless router at home to use WPA2 and it works fine. It sounds like there's another type of authentication going there. I.e. maybe a NAC client.
I'm connected to my home network using WPA2 AES. If I move to TKIP, or old WPA, still no problems.
Just for the record, PSK stands for pre-shared key -- all it means is that you use an out-of-band solution so share the key, meaning you know the key so you put it on both devices.
AES is the encryption algorithm -- the other option is TKIP, which is less secure (mostly because it's older, but it has some vulnerabilities).