MN-510 doesn't connect to MN-500 anymore

I'm hoping that someone will be able to help me out with a problem that
just started occuring.

I have two desktop computers running XP home edition. All latest
service packs have been installed. Both computers are only three feet
away from each other.

I have a Microsoft MN-500 wireless router on computer #1. I have the
MN-510 wireless USB adapter on computer #2. Both computers could access
the internet fine as of a day ago. Now, computer #2 can't.

I've checked the cables, firmware is the latest, and also tried
rebooting router and even resetting to factory defaults. I've
uninstalled drivers and reinstalled drivers as well. I've also tried
doing a system restore to a time when I knew both computers could access
the internet -- no go.

Computer #1 can access the internet fine, however computer #2 can't.
I've tried reconnecting several times, but it doesn't find my router.
It can detect several neighbors connections, but not mine. I do have
the broadcast of my SSID turned on and don't have wireless security
enabled (for the purposes of figuring out what happened).

I don't understand why computer #2 can see other connections but not the
one a few feet away. I was able to connect to my neighbor's network, so
I believe that my adapter is OK. On the other hand, I haven't changed
anything on computer #1 and that's connecting to the internet fine as well.

I don't see any settings within the network utility that would prevent
it from working. "Wireless network access" is enabled. I've also
temporarily disabled the firewalls on both computers just in case.

Anyone have any ideas on why this has suddenly started to occur? It's
been fine for 2+ years.

Thanks!

Remove the "no" in my email address if replying privately.

Much appreciated!