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I have a cheap Walmart Linksys router that I bought in 2005. I upgraded the firmware and that helped some. I live in an apartment settings so I find changing the channel frequency helped alot with Kindle 3 connection issues. There's a program called inSSIDer 2 you can download for free that will show what channels your neighbors are using. Just choose the one that isn't overlapped as much and gives you a strong signal. Most people never mess with this setting but it's really helps if all your neighbors are using default 6 and your network keeps dropping. I can't use channels 1-4 or my signal drops completely and five of my neighbors use default 6 with one neighbor using 11 so I went with Channel 8 because some microwaves interfere with Channel 9.
So before you throw out your router, Try changing the channel first.
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