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What kind of network are you connecting to? Some (WEP, I believe) have distinct phases of connection. I'm not an expert on networking (nor do I play one on TV!), but I recall an issue we had that stemmed from a race condition caused by this fact - android could show the wifi connection was established (eg, password was accepted), but no data could actually be transmitted because DHCP stuff had not finished yet. So there was a short period of time where things didn't work right. Perhaps your DHCP server was responding slowly? Just a thought...
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