I have a ancient Linksys router that is B/G. I've tried just about every setting and combination of encryption key possible. I don't have a problem connecting. When the X goes into hibernation, I lose the connection (even though the WiFi indicator is on, and Wi-Fi analyzer is showing a connection.) The only way I can get it back is to turn off the Wi-Fi and turn it back on. What is even more interesting is the 'sporadic-ness' of the disconnects. Usually I turn on Wi-Fi when I am at home, even at night. At times, it will remain connected through the night. Other times, it drops until I check emails, texts, etc. in the morning.
Right now, I am using WPA-TKIP. I really would like to use WPA2-AES for my encryption, but the X doesn't like that setting at all. At least now it maintains some connectivity.
I was hoping FroYo fixed this issue. I've seen mixed opinions here and other sites.