Frustrated....Streaming HD stutter. How to fix my network?

After spending an hour trying to get things working and throwing more than a few controllers across the room, I've decided to give up and just try to do something about this crappy wireless network I have in my house.

Here is the deal. I have my main gaming rig on the top level of my house. With it is the modem and router wired to my computer. I have 2 other laptops that get fairly heavy use connected to the router wirelessly, as well as another desktop in the basement that is rarely used but still connected.

My problem comes when I want to stream 720p or 1080p movies from my main rig on the top level to my home theater 2 levels down via my PS3 or 360. Normal movies work fine, but anything HD stutters like hell. Considering I have a 120" projection screen down there, I want to watch in HD.

If I tell everyone to stop using their computers and turn off anything that hogs up bandwidth it will work, but I don't want to have to do that. I want everything to work flawlessly. So what should I do?

I have a Linksys WRT54G wireless router.
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  1. Personally I would upgrade the router to a 300 N-wireless with 10/100/1000 Ports.

    I have used Linksys E2000 and E3000, and also Netgear WNR3500L and WNDR3700.

    another idea is to add another router and configure one as an Access Point. This way you could use one of the router, the one connected to the modem, to service your laptops and the other desktop, and the second router for streaming between your main rig and the PS3 or 360.

    the only other question would be are the PS3 and 360 connecting wired or wirelessly?

    personally I would go with the dual router setup. If you need more info on how to configure a router as a AP (Access Point) and how to hook it up, let me know.
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