Linksys WAG325N wireless router - wireless not working

I've just got a WAG325N and the ADSL/internet side of it is brilliant.
Trouble is, the wireless side of it isn't working. It came with Firmware
1.00.08 so I flashed it to the latest available (1.00.11) but the wireless
still doesn't work.

I've tried every available channel and, because I have no wireless N
adapters (only wireless G), I've tried the "Radio Band" at both standard
20MHz and wide 40MHz - but that doesn't work either.

Having had a WAG54GS and been very pleased with that, I'm surprised and
very, VERY, annoyed that the wireless network mode of the WAG325N is just
either "Mixed" or "Disabled" and not selectable as B, G, or N, because I
think that that may have something to do with it.

Also, the encryption method is listed in the drop-down box as "TKIP or AES"
and it seems to be automatically chosen, rather than the user being able to
choose TKIP or to choose AES - maybe this has something to do with it as
well.

Anyway, here's a description of the problem:

The wireless seems to be working in a "burst" or "pulse" mode somehow. When
my laptop sees a signal from the router it is only running at 24Mbps and it
is only there for about 5 to 10 seconds, then it drops out for about 5 or 10
seconds, and so the cycle continues.

If you look here www.thehewitts.eu/wifi.html you'll see a screen-dump of my
wireless adapter software showing signal strength and quality - it rises to
100% and then drops, 100% and then drops etc., etc. It is the same wherever
I take my laptop in the house - near the router or far from the router makes
no difference.

And it is *definitely* not any form of interference because I can change
between my BT Voyager 2091 wireless router and my BT Home Hub, both of which
work perfectly wirelessly - the problem is with the Linksys WAG325N.

Have I got a faulty router that needs to be returned to the store, or is
there some setting I'm missing somewhere?

Thanks

John