Last night, WiFi connection dropped and now it's a nightmare...

Last night, my iPad2 suddenly became unable to detect the router form more than about six feet away.  It's been working fine since it was purchased just before Christmas, however now, even sitting in the same room about three feet away, it drops from two bars to one, and I need to hold the iPad virtually on top of the router to get it to pick it up.
At home, I reset the router, updated the firmware, I've playeed with the router's channels, modes, name, every suggestion I could find online.  I reset the iPad, updated it, hard reset.
I took it to the Apple store today, and it connected to their WiFi with no problems, full signal.  I'm guessing, however, they don't use the average type of router you'd find in a normal household in their cavernous stores.  As they could detect no issues with it, I was sent away, no better off.
It's still under warranty - it's barely four months old - and I'm at my wits end already.  I've spent all day online (via my laptop!) and read endless forums about users with sinmilar issues, however I've been happily using the iPad since purchase without issue.  Any suggesitons welcome; my ideal outcome?  I'd quite like it replaced to be honest, but Apple won't be willing to do it obviously if they can't replicate the problem.
In my opinion, it's an issue with the antenna - I've had this issue with a wireless card in a laptop many years ago, whereby a signal was possible, but severely diminished.  I may be wrong, of course, but it's very frustrating, and a strange thing to happen out of the blue.

It's a Netgear VDMG280 (crap router supplied by Virgin)
2.4
I've restarted the iPad constantly, with every change to the router's settings; nothing seems to be helping.
I have the usual types of kit in the house, two laptops,an xbox, a ps3, and they are all connecting fine.  It literally happened last night - sitting watching the ITVplayer in the other room, and the signal disappeared and couldn't pick it up again.
I presently have one bar sitting about three feet away, directly in front of the router.  Asbolutely furious about it, and if it's the result of an update, I don't really feel it's fit for purpose and I'd like to think I'm well within my rights to request a replacement for it - but I'd rather just sort it myself, frankly.
It's very disappointing, to be sitting here with a £400 Angry Birds player.

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