ok i have the same problem but it happends every like 10 seconds. it goes from connected to the internet to local access only to disconnected and it repeats over and over again. my router is up stairs (airport extreme) and i use my laptop down in the basement. the only thing is is that my ipod touch can connect to the internet with no problem... and suggestions?
The two units are simply not handshaking.
It sounds like you are at the limits of range but I would also suggest temporarily disabling wireless security in the router (the Apple Airport Extreme) and see if that is an issue.
If your laptop is a Windows model you may be selecting the wrong wireless security type -- Apple doesn't use the industry standard terminology.
However I have heard of other problems connecting Airport Extreme to non-Apple computers.