MacBook Wireless slow and unreliable

Question

I got a MacBook on Monday to evaluate for my employer. The unit I received does not connect to our wireless network when waking from sleep, repeatedly forgets the wep key, and will say it i connected when it hasn't used the wep key, so it doesn't get a valid IP address.
When I do get it to connect briefly, the reception is all over the map and it drops occasionally. I know it is not our wireless router(s) as we have hundreds if not thousands of other machines (Winows, Mac, and even a Linux machine or two) connecting to our network daily. I have seen this kind of problem numerous times on Windows laptops, but I've never seen a hiccup from my 12 inch PowerBook unless there was something wrong with hardware. (the PowerBook is working just fine now)
I have tried setting the MacBook to only connect to preferred networks, creating a new location, adding the key to Keychain Access, enabling interference robustness, Reordering network ports in network configurations, (bluetooth and firewire are now at the bottom, but I don't want to put AirPort at the top because I want it to use the cable connection if one is present. Any ideas? The MacBook has been fully updated with the latest software updates, but other than that it's stock.
I'm also getting many console messages like this: (network names and computer names removed for security reasons)
Resources/airport: Error: WirelessAssociate2() = 88001006 for network *****
May 24 09:00:26 ****-computer /System/Library/PrivateFrameworks/Apple80211.framework/Resources/airport: Error: (had password)
May 24 09:00:38 ****-computer mDNSResponder: Repeated transitions for interface en1 (FE80:0000:0000:0000:0216:CBFF:FEB6:7418); delaying packets by 5 seconds
May 24 09:00:42 ****-computer mDNSResponder: Repeated transitions for interface en1 (169.254.129.186); delaying packets by 5 seconds
Any suggestions would be appreciated

Answer 1

The settings on our routers are
A: Not under my control, and even if they were, we're not going to flash settings on hundreds of access points to allow MacBooks to connect. We have no problems with any of our PowerPC macs, although we have seem some weirdness with MacBook pros, which have been fixed by creating a location (which I have done several time)
B: Not causing persistent problems with ANY other machines. (including our intel iMac which has been connecting to the wireless network solidly since we got it) The Windows machines that exhibit this problem are generally fixed after re-adding our wep key to the preferred networks list. (which I have done on the MacBook, repeatedly) I have not installed boot camp on this machine to see if it exhibits the same behavior under Windows.
C: I can connect the MacBook to an unsecured wireless network that we run for guests which does not permit access to any of our network resources. I had it connecting to our secured network briefly yesterday afternoon, by selecting "other..." from the wireless menu in Internet Connect, entering the password and saving it in the keychain. I then put the machine to sleep. When I came in this morning and woke it up it said "None of your trusted networks can be found would you like to join network "network that I joined yesterday afternoon" I said no, because it was already in the trusted networks list, put it to sleep, woke it up again, same thing. If I connect to the network when it shows up in the list, it does not ask me for a password, says it has connected, and gets a 169.x.x.x address. Refreshing DHCP lease does nothing, and I suspect that it is not really connected at all.
D: I am suspecting this is a software/driver issue with the network card in the MacBook, or I got a bad unit. If it is software, I really hope it is fixed soon, as I simply cannot recommend this machine to students if it cannot connect to our secured wireless network. I would like to offer them something that is less than 2000 bucks right off the bat. It does not seem to correctly recognize that the network has a password, as such does not prompt for one. It gives feedback that it is connected, but it does not get an IP address. This has happened in other areas of campus, so it is not the wireless access point around my office. I'll probably call Apple Support this afternoon and see if they can give us any suggestions.
Thanks.