Ah, there goes my theory, That driver bug only applies to kernels > 3.1

I honestly don't have any other ideas as far as what could be causing this, but I wish you the best of luck with fixing the issue.

No worries trademark. Thanks for your effort all the same.
The wireless system was working perfect so don't think it is driver either.
I have a couple of thing to try as soon as i figure out how to do it.

daz

Only advice I can offer here is try to isolate the problem. Does your laptop appear to work with any other wireless router? Or if you can find another wireless device that can connect successfully to the router.

I have had the same problem last year with my ipw2200 wireless having troubles maintaining connection to the wireless router which was in the same room. It would intermittently lose carrier, then reconnect, get an IP Address from DHCP (although sometimes the carrier was lost again). It didn't seem to matter if the laptop was busy or not. I ended up just connecting directly to the router through Ethernet.

I'm guessing though that your wireless is going bad (especially if it was working good with no changes to wicd or kernel and then all of the sudden it stopped working).