I can't make my new wrt160nv2 work at all

I have a linksys cablemodem and router befsr41v4.3. I've been running a vista machine and xp machine with no problems for the last 2 years. Just got a Toshiba laptap that we want to connect to the internet also but use around the house so bought a WRT160Nv2. Followed the install disk for installation, named a SSID, unplugged and plugged in and finally got a done message saying everything was installed and done.
Plugged in the two desktop computers and went to IE7 and got a cannot connect to the internet. Network diagnostics came up with everything working fine in the computer.
Played with the Toshiba and it says it found the network I had named but can't connect to the internet.
Ran the disk set up because there was no documentation in the box and while I was at it printed the pdf manual. After the disk set up ran again got a message that the eternet cable was not connected and for me to plug it in.
But the cable was plugged in.
When I return to the old set up (the befsr41 wired router) then the desk tops and the Toshiba can all surf the internet (I plugged in a cat5 cable into the Toshiba).
How do I tell if the wrt160 itself is broken (just bought it 3 days ago!)? It seems odd that both the Toshiba wireless portion and the desktop wired portion both can't get onto the internet and I get a message that the ethernet cable is not connected.
Not knowing very much about the wireless portion (worked with wired only and talked to the best buy guy about how easy it is to replace the befsr41 with the wrt160n) but after the install disk is done installing the program, is the Toshiba automatically supposed to find the router and connect? When I search the Toshiba and go to network properties it says it's connected "a" network called the same thing that I called the wrt160n during the setup and that I get 4 or 5 green bars showing the connection between the Toshiba and the wrt160n. But there is a big red X between the router and the internet.
I was expecting something a lot easier than this to be able to use the internet on the desktops through the wired ports and the Toshiba throughout the house through the wireless portion.
It seems odd that BOTH the wired and the wireless don't work at all. I could understand I don't know how to get the Toshiba to connect wirelessly and I need to play with it but when I can't connect at all makes me think the problem is in the wrt160n.
Any thoughts before I take this thing back to best buy?

If you are trying to configure your Router with the Setup disk, you can exit from the Setup and configure your Router Manually.
If your Internet Service Providor is Cable follow this link ----- Once you are able to go online from the Wired computer, Below are the Wireless Settings which you can set on your Router and this will make your Laptop go Online Wirelessly.
Open an Internet Explorer browser page on your wired computer(desktop).In the address bar type - 192.168.1.1 and press Enter...Leave username blank & in password use admin in lower case...
For Wireless Settings, please do the following : -
Click on the Wireless tab
-Here select manual configuration...Wireless Network mode should be mixed...
-Provide a unique name in the Wireless Network Name (SSID) box in order to differentiate your network from your neighbours network...
- Set the Radio Band to Standard-20MHz and change the Standard channel to 11-2.462GHz...Wireless SSID broadcast should be Enabled and then click on Save Settings...
Please make a note of Wireless Network Name (SSID) as this is the Network Identifier...
For Wireless Security : -
Click on the Sub tab under Wireless > Wireless Security...
Change the Wireless security mode to WEP, Encryption should be 64 bit.Leave the passphrase blank, don't type in anything...Under WEP Key 1 type in any 10 numbers please(numbers only and no letters eg: your 10 digit phone number) and click on save settings...
Please make a note of WEP Key 1 as this is the Security Key for the Wireless Network...
Click on Advanced Wireless Settings
Change the Beacon Interval to 75 >>Change the Fragmentation Threshold to 2304, Change the RTS Threshold to 2304 >>Click on "Save Settings"...
Now see if you can locate your Wireless Network and attempt to connect...

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