2 XP machines, one of them is the notebook we are discussing, 1 Windows 7 machine, 1 Nintendo Wii, 1 Sony PSP.
Is your router set-up to allow multiple devices? ANd if so how many? Sounds stupid, I know, but try it with all of the others off and make sure your phones are not connected to the network. Everytime I put my Droid on Wifi, it bumped everyone else in the house off of Wifi. It took me a couple weeks to figure out it was the Droid. I had to expand my allowed devices to make it stop. (If you have that Wii set for internet , specifically connected to your home network with a password and all- unplug it. Mine still gets damn emails even when I have it turned off)
I'm looking for a fix. No one seems to have beat it, though. Most common thing I see is that this is common with WIndows XP and your particular wireless card. They blame the Service Packs, mostly SP3, the driver updates for the card, and interference. Have not found anyone who has actually fixed it yet, except for the guy who downloaded the card update from Dell when the Intel update would not fix the issue.
Common theme is interference and from what I have seen, there really is no way to see ALL the networks around you. A few switched from WPA to WEP and got 'some' improvement (Stronger ping - 70%) and not dropping as frequently or as much. I'll keep looking til YRAG shows up. 
**EDIT - Check with your provider on who is using what channel. That;s how I found out about that little issue. There were wifi's I could NOT see on my PC when I did a search. They will know for sure if anyone is on your channel.
One final note..I went through something like this on my step-sons PC about a year ago. YRAG helped me and we couldn't find the answer. Then I stumbled across someone who had the same issue. I actually had to download an 'exe that tricked the wireless card into thinking my router was another brand and channel (n,g,d or whatever it had to be convinced of) and it worked. I will have to see if I can find that. I thought I saved it but I have to many damn bookmarks.