Many ppl Not being able to connect to internet although wifi connected.

Question

Other forums are recieving many posts a day on this issue, and as I understand it Apple are recieving alot of calls on this issue:
Description:
Connection to an encrypted wifi network seems succesfull, however when attempting to reach the internet Safari throws up an error - The server could not be contacted - or words to that effect. None of the Internet requiring Apps work although the wifi signal indicator shows signal indicating connection.
When you click on the little blue arrow to the right of the network connection you are connected to, in "Settings > Wifi" you see a self assigned IP Address starting 169.254 and a subnet mask 255.255.0.0, with possibly no DNS if you haven´t manually entered it and no gateway.
Peculiarities:
1 Problem is widespread, not tied to specific make of router or AP, also it happens to most people on more than one AP or router
2 People with this problem are assigned a 169.254 IP address, Indicating no DCHP lease of an IP address
3 Ive ran a packet capture using wireshark and Air PCAP and seen no packets for a DCHP request.... wierd.. it looks like its not even requesting an IP address..
4 Only seems to happen on networks using some kind of encryption be it WEP, WPA, etc...
5 Although theres bars in the wifi icon that indicate a connection, it cannot be connected to the network, just try and ping your device when its supposedly connected, look at the IP.. it cant be on the network.
6 Even if you manually imput the IP address, sub mask, and gateway IP it still wont work.
7 People with Iphones seem to be able to circumvent this issue or a similar issue by manually selecting the encryption method or changing the encryption method on the router.
8 Issue observerd in varied firmware versions
Possible Conclusions:
1 The Ipod is selecting the wrong kind of encryption when the enter password dialog box comes up? OR bad key negotiation between IPOD and Router.
Although scenario 1 shouldnt be the case as WPA and WPA2 have to be a certian length etc..
Note: I have tried connecting to the network by manually entering the network details and encryption under Settings > Wifi > Other and still no luck..
Questions:
Could someone with this issue confirm 1 wheather they are using WEP encryption. 2 weather it works on a non secure router or AP. 3 weather they are imputting the full HEX key or a passphrase?
I get the feeling if you use the full hex key it may work, ive seen posts around about having to make it recognise that you are using HEX by appending a $ sign to the start of the key.. although i dont know how true this is.
I have no access to the router that dosent work for me.. so cant do tests as my home one works on all encryption methods, but ive seen about 5 Routers and AP´s so far that wont work.. all using WEP..
NOTE
On one specific AP I connect with my Ipod and get no IP from DHCP so no internet, yet my colleague sitting right next to me with an iPhone gets a DHCP assigned IP and is surfing away no probs! it even automatically connects, and im very jealous..!
Anyone got any ideas?

Answer 1

This happened to my ipod touch recently, on my own network--it worked the night before, but not the next morning (even though I had a full wireless connection on the touch). I had to 'forget' that network and re-add it (including WEP) and then I was able to re-connect. no idea why this occured, but that did the trick. So far, I've only had to do that once...