Assuming you've checked router wirless setup and wireless in "enabled." For now, also make the SSID visible.
Here's my two cents. It is more likely the wireless NIC on your computer than the router.
Remove the wireless NIC drivers.
Reinstall the drivers from scratch, if you have a d-link NIC, do NOT install the connection manager.
Configure your wireless connection using Microsoft O/S.
Do not use channel 11. It is the most likely to have others using it as it is a common factory default. Same with channel 6. Try other channels.
If you still have difficulties, it would be recommended that you tell the forum members the make and model of your wireless NIC and any related contents of the router log.
I disagree with your insisting on using firmware 1.21, however, that is not related to your problem.