Dropping wifi on MacBooks-need help please

Question

I'm sorry, I'm new to Macs and I need some help. I've done a bunch of searching and am just not finding a solution - maybe there isn't one.
We have two MacBooks in our home, and four PCs.
Two weeks ago, both MacBooks started dropping the wifi connection. Airport will read full bars, but internet/mail don't work. The PCs are unaffected.
I have a linksys Wireless N router that we purchased, looks like this though I'm not at home at the moment and am unsure of the exact model number.
http://homestore.cisco.com/en-us/Routers/Linksys-E1000-Wirelessn-router_stcVVpro ductId97826160VVcatId551966VVviewprod.htm
I've tried turning on and off airport, renewing my DHCP Lease (which I thought was working but after a few days the problem returned). Almost every time I turn on and off the airport and click on my network (secured) to join it makes me re-enter my WPA key, even though I've clicked to remember the password in my keychain. Sometimes the on/off works, but only for 10 or 20 minutes and then I have problems again. Some days I have no issues and other days are really bad and I can't get on the internet all night on the MacBooks.
I also tried going into my router settings and changing the channel and that seemed to screw up ALL the computers, even the PCs, so I had to put it back to auto configuration. I thought maybe that other networks in the area (I'm in a single family but for some reason I can see about 8 other networks in the neighborhood in my airport drop down) might be interfering.
I have read some threads that suggest 10.6.7 (which both MacBooks are currently running) might be the issue, and that you can revert back. I do not know how to do this. I have not backed up my system using time machine yet (got my MB at the end of March and don't have a new external harddrive to use time machine with - the one I have currently has all the backup from my PC on it and I don't want to delete it). Is there a way to revert the software back without having to re-install using the installation disks, therefor losing everything on the Mac? I mean, I don't even know if going back a version will fix it, or perhaps just suffering until Lion comes out?
Any suggestions?

Answer 1

So if i put in the installation disk all photos/music/files will remain on the computer? it doesn't revert my system back to factory default? one of the threads I was reading they were discussing backing up the system first so I thought I'd lose everything.
the wifi issues will happen even when our macs are sitting about 5 feet away from the router, even. And yet other times they'll work perfectly when we're on a different level in the house. When I say wifi drops, airport sees the network, sees full bars, there's an IP address in the network settings, but internet pages won't load and mail won't receive/send.
Also, when I click on my network to try to get it to re-connect, I get a screen like this person did:
https://discussions.apple.com/message/15381600#15381600
where it says connection timeout, or invalid password (even though it is a valid password and eventually after many tries to connect will randomly work).