WiFi not working with 2G iPod Touch (2.1.1)

I just sold my 1st gen iPod touch on craigslist and got 2nd Gen. What a disappointment so far. It will not connect to my WiFi router using WPA/WPA2 encryption. I searched forums and found other people here having same issues. Someone suggested to do a Network Reset on the iPod device. It helped, I got connected only to be disconnected after iPod was turned off. Second reset didn't do anything. I can't connect now. My previous iPod worked just fine, laptops can connect without any issues. Now it only works if I completely disable wireless security leaving network open to anyone. My router is D-Link 4300. I'm a system engineer btw. I'm hesitant of calling support, since I only get one free call... Does it mean I have to buy a "compatible" router now? I hope it's just a firmware issue and will be fixed ASAP. Apple please respond.
Message was edited by: Bratan

MCMLXIII wrote:
I feel fortunate. I have WPA2 encryption and the 2G touch with 2.1.1 works like a champ. I do have an all alpha-numeric key, though. I wonder if that is the correlation.
If by "alpha-numeric" you mean a jumbled string of letters and numbers, as opposed to using a passphrase--well FWIW I'm using WPA-PSK with a 63-character passphrase (the phrase just so happened to be 64 characters long, so I got rid of the 64th character), and I have no problems getting my 2G IPT to connect to my wireless router.

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