It Connects gets DHCP but no ping or internet

I have a wireless problem with my Dell Inspiron 600M internal wireless. The NIC chipset is a INTEL(R) PRO/WIRELESS 2200BC NETWORK CONNECTION. I just wiped the hard drive and reinstalled XP Home, SP2, all critical patches, and all Dell drivers. There are no problems in the Device manager with any device. The NIC is working properly, IRQ 5 with no conflicts. The NIC can connect to my router with no security, and my neighbors router with no security, and everything works normally. If I turn on my router WEP and enter the correct password in the laptop, the wireless connection will say "connected at 54MBS with excellent signal strength". After authenticating, the DHCP gives the laptop a good IP address, mask, gateway, and DNS servers shown in ipconfig /all. If you try to ping you cannot ping the gateway or any location on the internet or LAN, and of course DNS doesn't work and internet explorer doesn't work. You can ping the local laptop IP address given by the DHCP server. Another laptop can connect through the wireless router using the WEP with no problems and access the internet. It shows the same info in ipconfig /all (different local address).

The on board wire NIC works normally with good connections, and I have disabled this connection and unplugged it for testing the wireless. If I use an incorrect wep password it "connects" with "Limited connectivity" and does not get any DHCP info, so I can tell when I am using the correct password. I consider myself a pretty good computer tech with hardware and software, but I don't have much wireless experience. This one is baffeling me. Is there some command to tell it to turn on and talk through the wireless NIC?

Yes close to the router, about 10 feet, tired several locations. Haven't heard of these programs. Do they run under windows or do I have to reload the system with Linux? If they are windows programs to simulate Linux, do they actually use their own drivers to communicate or do they talk through to the windows OS, or disable windows while running?