Wifi Connectivity issues with a 2008 Apple Macbook

Hi I have had BT Total Broadband for 14 months with constant issues in relation to the Wifi connectivity on my Apple Macbook.  I got Infinity installed and am still having the same issues.  Other devices - Iphone and Ipad - work fine but the Macbook only works in one room of my house.  I have had the Macbook checked and there are now issues technically with it according to the diagnostic team at the Apple store.  I have tried changing channels and nothing like this is helping.  BT are insisting I have to pay a cancellation charge of £159 to cancel my Infinity - even though it was only installed on Friday.  
The engineer installed the modem and BT Homehub 3.0 router at my main socket into the house which is in an understairs cupboard - the modem and hub are now sitting on the floor!!!!  I have been advised that this won't be helping the signal.  As soon as I move from the living room to another room downstairs it drops and doesn't work at all upstairs.  
I don't feel that there is any point in investing in an Airport Extreme as I have no guarantee that this will improve the level of service provided by BT.  
I have also over the weekend tried different wifi networks outside of my house and it works fine on all of these including what is meant to be a less superior Sky Broadband service?
Does anyone have any ideas what else I can try - I have lodged a complaint with BT and am waiting on a repsonse at the moment.
thanks 

Hi,
Long time Mac/Infinity user here.
Macs rarely have problems with their wifi, any problems that do occur are more often due to external issues, such as poor siting of the router, or co-channel interference from a neighbouring router. From your testing at the Apple Store and on other networks there is nothing obviously wrong with your machine.
Having the HH3 on the floor is just about the worst place you can site it. Generally you should position a wireless router as high up in the working area as possible; at least desk height is desirable. A very simple thing to try is borrow a longer Ethernet cable to go between the OpenReach Modem and the HH3 and then temporarily position the HH3 higher, say halfway up the stairs. There should be an immediate and noticeable improvement in the signal.
If matters do not improve, make sure that all the Apple Software Updates have been done (connect the MacBook with an Ethernet cable to do this if necessary).  Next, completely delete the wireless setup on the Macbook for the HH3 (and any other old setups you may have) and complete the setup of the HH3 from scratch.
You may still find there is a lack of signal and this could be due to co-channel interference with another wifi router in your neighbourhood. Try manually switching the router onto Channel 13 as relatively few ISP's devices use this channel by default. Alternatively try Channel 1.
You can download a free WiFi "sniffer" called Kismac to check what channels are being used by other routers in your area.
To manage the hub, launch your browser of choice and enter 192.168.1.254 (DO NOT put http:// in front of this!) and press Enter. (The Hub Manager software is a PIA and should not be installed; use the CD as a coaster for your coffee cup!).
The Airport Extreme is a very good replacement for the HH3 and is far superior in terms of the WiFi signal. If you want to try one, order it on-line from the Apple Store . . . you can return it if it does not work as expected!

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