Windows 7 connectivity issue with second WPA2 profile

Hi, am having a few issues setting up a new WPA2 small office wireless network and am looking for some advice on what might be a known issue.

Network is using a brand new (bought yesterda after the old netgear was deemed past it) Belkin wireless G modem router.
All wired connections are working fine, across 3 Macs, 1 XP PC and 1 Windows 7 laptop.

The router is configured for WPA2 with PSK, ad set to use both encryption types.
The XP machine has a 3rd revision Belkin USB adaptor that has a stable connection to the Belkin wireless, -t ping shows it drop every once in a while but thats not a concern at the mo. This is an ancient machine that took all of 2 minutes to create a WPA2 connection.
I have run InSSIDer for a good 30 minutes without a significant dropoff in wireless strength.
The Windows 7 Laptop has uptodate Network drivers.

The issue occurs when i unplug the ethernet and use the systray icon to autoconnect to the Belkin on the Windows 7 Laptop. Windows asks for the key, thinks for a bit then decides it doesnt want to connect for whatever reason. Running the diagnostic informs me i need to reset the router, which of course is rubbish.
I also have deleted any existing wireless profiles created through autoconnecting and created a new profile from scratch. This did actually succeed once (i have tried both methods 4-5 times each) but connection was lost very quickly.

Heres the clincher - the laptop is used at this small office but taken home at night where the lady uses a WPA2 home network and has no connectivity problems whatsoever.

Id appreciate any input anyone has as to why the laptop cant handle a second WPA2 connection.