Mine is on my house wifi just fine. I use 128 bit WEP. Make sure your setup is also using 128bit. It's a 16 character key, IIRC.
128 bit WEP is 26 hex digits, (13 bytes).
My droid works fine on my own WPA2 network (Linksys router running DD-WRT). Haven't tried it with WEP, but WEP is kind of old and unused now.