Router DNS/DHCP settings prorogation problems to wireless networkcard - WEIRDEST PROBLEM IN THE ENTIRE UNIVERSE (modern Gordic knot)!!!!

Ok,

This problem is not for the faint of hearts. King Arthur's Excalibur
and the Gordic knot test are easy in comparison.
In fact, I think that I have been bestowed with a task that only the
worthy can solve, and he who solve it shall rule the world for all
other problems are little in comparison. This is a true test for all
geeks and hardware/network gurus. If this problem will not be solved
soon, the world shall be engulfed with darkness!!!!!

FACTS:
======
* Windows XP with SP2 latest updates/patches
* Wireless network card Intel 3945ABG
* D-Link dsl-2640b wireless router with built in modem
* ISP provider: AT&T
* Me: a 31 years old guy who works as a computer programmer (meaning
he knows a wee bit about computers).
Already spent countless hours on this - D-Link support are just
horrible and have no idea (even level III support).
* Router is not defective as the problem exists after I exchanged it
with a new one and problem persists.

When connecting with an ethernet cable to the router, all is well - I
can browse the internet.
When switching to wireles (and disconnecting the cable), I can browse
the internet for a few minutes *before* my wireless interface IP/DNS
settings are refreshed. The weird thing is that when it is working
(ethernet cable connection settings), the settings seems incorrect and
when using the wireless connection, settings appear correct (except
DNS) but no internet access. The wireless card can work with other
networks (picked up some of the neighbors and it works fine).

ipconfig /all when network cable is connected:

Windows IP Configuration
Host Name . . . . . . . . . . . . : jt-thesoftforge
Primary Dns Suffix . . . . . . . :
Node Type . . . . . . . . . . . . : Broadcast
IP Routing Enabled. . . . . . . . : No
WINS Proxy Enabled. . . . . . . . : No

Ethernet adapter Local Area Connection:
Media State . . . . . . . . . . . : Media disconnected
Description . . . . . . . . . . . : Intel(R) PRO/100 VE
Network Connection
Physical Address. . . . . . . . . : 00-13-A9-47-40-0D

Ethernet adapter Bluetooth Network Connection:
Media State . . . . . . . . . . . : Media disconnected
Description . . . . . . . . . . . : Bluetooth Device (Personal
Area Network)
Physical Address. . . . . . . . . : 00-10-60-D0-0E-E8

Ethernet adapter Wireless Network Connection:
Connection-specific DNS Suffix . :
Description . . . . . . . . . . . : Intel(R) PRO/Wireless
3945ABG Network Connection
Physical Address. . . . . . . . . : 00-18-DE-09-C4-D4
Dhcp Enabled. . . . . . . . . . . : Yes
Autoconfiguration Enabled . . . . : Yes
IP Address. . . . . . . . . . . . : 76.250.11.178
Subnet Mask . . . . . . . . . . . : 255.255.255.0
Default Gateway . . . . . . . . . : 76.250.11.178
DHCP Server . . . . . . . . . . . : 192.168.1.1
DNS Servers . . . . . . . . . . . : 68.94.156.1
69.227.255.30

Lease Obtained. . . . . . . . . . : Sunday, January 27, 2008
16:51:26
Lease Expires . . . . . . . . . . : Sunday, January 27, 2008
16:51:56

ipconfig /all when wirelessly connected:

Windows IP Configuration
Host Name . . . . . . . . . . . . : jt-thesoftforge
Primary Dns Suffix . . . . . . . :
Node Type . . . . . . . . . . . . : Broadcast
IP Routing Enabled. . . . . . . . : No
WINS Proxy Enabled. . . . . . . . : No

Ethernet adapter Local Area Connection:
Media State . . . . . . . . . . . : Media disconnected
Description . . . . . . . . . . . : Intel(R) PRO/100 VE
Network Connection
Physical Address. . . . . . . . . : 00-13-A9-47-40-0D

Ethernet adapter Bluetooth Network Connection:
Media State . . . . . . . . . . . : Media disconnected
Description . . . . . . . . . . . : Bluetooth Device (Personal
Area Network)
Physical Address. . . . . . . . . : 00-10-60-D0-0E-E8

Ethernet adapter Wireless Network Connection:
Connection-specific DNS Suffix . :
Description . . . . . . . . . . . : Intel(R) PRO/Wireless
3945ABG Network Connection
Physical Address. . . . . . . . . : 00-18-DE-09-C4-D4
Dhcp Enabled. . . . . . . . . . . : Yes
Autoconfiguration Enabled . . . . : Yes
IP Address. . . . . . . . . . . . : 192.168.1.2
Subnet Mask . . . . . . . . . . . : 255.255.255.0
Default Gateway . . . . . . . . . : 192.168.1.1
DHCP Server . . . . . . . . . . . : 192.168.1.1
DNS Servers . . . . . . . . . . . : 128.9.0.107
Lease Obtained. . . . . . . . . . : Sunday, January 27, 2008
16:54:53
Lease Expires . . . . . . . . . . : Sunday, January 27, 2008
16:55:03

I have absolutely no idea where the DNS ip address of 128.9.0.107 is
assigned from (agents of evil or aliens from outer space which tests
my sanity?).

Router info:

Line Rate - Upstream (Kbps): 384
Line Rate - Downstream (Kbps): 1536
LAN IP Address: 192.168.1.1
Default Gateway: 151.164.186.8
Primary DNS Server: 68.94.156.1
Secondary DNS Server: 69.227.255.30

By the way, I tried using two other laptops to connect to the internet
using the router and all for not.

One more thing: AT&T told me that the VPI is 3 and VCI is 126. When
configuring the router with these settings, there is no internet
connection. Only the 0/35 default works.

I personally guarantee a chocolate cake and a passport to heaven with
no expiration date to whomever solves this issue.

I forgot to mention that I tried setting the router's DNS manually and
also configured my network card DNS/IP manually.
While they appeared to have been configured it made absolutely no
difference.
I cannot ping anything successful (aside from the router).
It doesn't matter which wireless connection manager I'm using.
I also tried without any firewalls/anti virus and updated to the
latest drivers, ran winsock fix programs, etc.