Yet another disgruntled customer who can't connect to a wireless network

Question

I bought a 16Gb iPod Touch yesterday and I think it's a great bit of kit. One of the selling points for me was the ability of the Touch to connect wirelessly to networks so you can imagine how disgruntled I am now when I find this not to be strictly true.
I actually work in IT and am no computer novice so I am extremely frustrated not to be able to get this resolved.
So, first, my router and settings (PC is running XP SP2 but I don't think that's relevant)- it's a Netgear DG834GT wireless router and my ISP is Sky.
The router is set to broadcast SSID and is set for 802.11 g and b communication. I use wireless access control and have added the iPod as a trusted device.
The router is also set to use WPA-PSK encryption.
On the iPod I can see the network and when I try to join it I enter the network key and the ipod tries to join the network. The key/password I am entering is correct and in the right case. The ipod then retuns a message stating that the password is incorrect, but I know that it isn't.
So, I thought I'd try WEP encryption to check the router. Obviously, this uses a different key (much longer) and when I tried to connect the ipod it connected straight away and I was able to use all the web applications, etc.
However, I don't want my network using WEP encryption as it is much less secure and can be hacked quite easily. Using WPA encryption I have a PC and a two laptops connected wirelessly, a PC and a laptop connected via ethernet cable and an Xbox 360 connected via ethernet cable. But the iPod touch? No way!
I have searched many forums, including this one, and this appears to be a very common problem, and one that Apple just don't seem to be addressing. Although I have tried various solutions (spent most of today on this and have tried lots of things), none of them have worked and I have not seen a forum post that solves this.
I have tried:
Router firmware updated
Touch reboot
Router reboot
Server reboot (not that that would make a difference, the network is there without the server)
Touch firmware at latest version
Connected via WEP, re-enabling WPA, disconnecting ipod and then reconnecting
Can't remember what else - loads of things suggested in various posts.
I then rang the Apple help desk and spent 10 minutes explaining the issue to the HD operator who didn't know the difference between WEP and WPA so I was on to a loser there. Eventually I got put through to the technical team who quite simply refused to accept that the ipod was at fault (despite evidence to the contrary (forums, etc) and her own admission that there had been many calls about this), and blamed my router. After 40 minutes on the phone I had got nowhere but agreed to follow up with my ISP.
So I rang Sky technical support and explained the problem. His response (understandably) was that if my network had several wired and wireless devices connected using WPA the logical conclusion was that the ipod was at fault. I tend to agree with him but nevertheless I asked about router firmware. Sky upgrade customer routers with the latest firmware (although it is a version customised by Sky, and not the latest Netgear version) automatically, in the middle of the night, so the firmware is up to date.
So where do I go from here? Apple seem to refuse to accept there is a problem with a flagship product but I intend to pursue this right to the top. I have spent alot of money on a product that is not delivering the functionality I was led to expect. I don't want to return it as I think it's one of the best bits of electronic kit I've ever bought (see how sad I am!), apart from not doing what it says on the tin!
Any help in solving this would be greatly appreciated: not only by me, but by hundreds of others who are experiencing the same problem and being frustrated beyond belief.
Many thanks in advance.

Answer 1

A very naive response Krowe. I assume you mean on WEP, rather than WAP.
I think you're missing the point, which is that the iPod Touch does not do as it promises.
Apart from that, you can if you wish, leave your router on WEP security and run the risk of not only having your network compromised and having data intercepted - you don't need to be a secret government agent/spy/renegade/software pirate/convict on the run to be using passwords on various sites for various reasons or storing sensitive information on your PC - but also somebody else using the bandwidth that you have paid for, to do whatever illegal activities (send Spam mail, use stolen credit cards, etc) they wish with an IP address that can't be traced back to them. The IP address is unique and assigned to your connection, once a hacker is on your network he/she has as much control over your PCs as you do.
WEP is not secure (try googling for "hacking wep") and just because I use MAC filtering doesn't mean somebody won't be able to access my network. A hacker will be able to detect what MAC addresses are registered and then use one himself.
Why do you think the WPA protocol was developed?
Anyway, all of this is besides the point. I am not prepared to weaken my network security - all I want to do is get mt iPod Touch working with WPA encryption.