It is definitely the adapter, not sure if it is a firmware, driver, or hardware issue though. I tested it against a DIR-625 in G and N modes with same bad results. I ran a ping while streaming video and every time a hiccup happens it seemed there is a > 2 second delay in the ping reply:
Reply from 192.168.0.199: bytes=32 time=1ms TTL=64
Reply from 192.168.0.199: bytes=32 time=2ms TTL=64
Reply from 192.168.0.199: bytes=32 time=1ms TTL=64
Reply from 192.168.0.199: bytes=32 time=2ms TTL=64
Reply from 192.168.0.199: bytes=32 time=2ms TTL=64
Reply from 192.168.0.199: bytes=32 time=10ms TTL=64
Reply from 192.168.0.199: bytes=32 time=1ms TTL=64
Reply from 192.168.0.199: bytes=32 time=1ms TTL=64
Reply from 192.168.0.199: bytes=32 time=1ms TTL=64
Reply from 192.168.0.199: bytes=32 time=3ms TTL=64
Reply from 192.168.0.199: bytes=32 time=2ms TTL=64
Reply from 192.168.0.199: bytes=32 time=1ms TTL=64
Reply from 192.168.0.199: bytes=32 time=1ms TTL=64
Reply from 192.168.0.199: bytes=32 time=1ms TTL=64
Reply from 192.168.0.199: bytes=32 time=2776ms TTL=64Reply from 192.168.0.199: bytes=32 time=10ms TTL=64
Reply from 192.168.0.199: bytes=32 time=1ms TTL=64
Reply from 192.168.0.199: bytes=32 time=2ms TTL=64
Reply from 192.168.0.199: bytes=32 time=1ms TTL=64
^C
C:\Windows\system32>ping 192.168.0.199 -t
Reply from 192.168.0.199: bytes=32 time=1ms TTL=64
Reply from 192.168.0.199: bytes=32 time=2ms TTL=64
Reply from 192.168.0.199: bytes=32 time=6ms TTL=64
Reply from 192.168.0.199: bytes=32 time=2ms TTL=64
Reply from 192.168.0.199: bytes=32 time=1ms TTL=64
Reply from 192.168.0.199: bytes=32 time=1ms TTL=64
Reply from 192.168.0.199: bytes=32 time=2ms TTL=64
Reply from 192.168.0.199: bytes=32 time=1ms TTL=64
Reply from 192.168.0.199: bytes=32 time=2171ms TTL=64Reply from 192.168.0.199: bytes=32 time=4ms TTL=64
Reply from 192.168.0.199: bytes=32 time=3ms TTL=64
Reply from 192.168.0.199: bytes=32 time=3ms TTL=64
Ping statistics for 192.168.0.199:
Packets: Sent = 42, Received = 42, Lost = 0 (0% loss),
Approximate round trip times in milli-seconds:
Minimum = 1ms, Maximum = 2171ms, Average = 54ms
Control-C
^C
C:\Windows\system32>
C:\Windows\system32>
C:\Windows\system32>ping 192.168.0.199 -t
Reply from 192.168.0.199: bytes=32 time=2ms TTL=64
Reply from 192.168.0.199: bytes=32 time=1ms TTL=64
Reply from 192.168.0.199: bytes=32 time=20ms TTL=64
Reply from 192.168.0.199: bytes=32 time=1ms TTL=64
Reply from 192.168.0.199: bytes=32 time=2ms TTL=64
Reply from 192.168.0.199: bytes=32 time=2ms TTL=64
Reply from 192.168.0.199: bytes=32 time=2529ms TTL=64Reply from 192.168.0.199: bytes=32 time=2ms TTL=64
Reply from 192.168.0.199: bytes=32 time=2ms TTL=64
Reply from 192.168.0.199: bytes=32 time=1ms TTL=64
Reply from 192.168.0.199: bytes=32 time=1ms TTL=64
Reply from 192.168.0.199: bytes=32 time=2ms TTL=64
Reply from 192.168.0.199: bytes=32 time=3ms TTL=64
Reply from 192.168.0.199: bytes=32 time=1ms TTL=64
Ping statistics for 192.168.0.199:
Packets: Sent = 97, Received = 97, Lost = 0 (0% loss),
Approximate round trip times in milli-seconds:
Minimum = 1ms, Maximum = 2529ms, Average = 50ms
Control-C
^C
C:\Windows\system32>
Reran the same test against the DIR-825 in N mode while pinging the router interface this time, and same 2+ second delay when hiccup occurs:
Reply from 192.168.1.1: bytes=32 time=2ms TTL=64
Reply from 192.168.1.1: bytes=32 time=1ms TTL=64
Reply from 192.168.1.1: bytes=32 time=2ms TTL=64
Reply from 192.168.1.1: bytes=32 time=2ms TTL=64
Reply from 192.168.1.1: bytes=32 time=1ms TTL=64
Reply from 192.168.1.1: bytes=32 time=2ms TTL=64
Reply from 192.168.1.1: bytes=32 time=1ms TTL=64
Reply from 192.168.1.1: bytes=32 time=3ms TTL=64
Reply from 192.168.1.1: bytes=32 time=2ms TTL=64
Reply from 192.168.1.1: bytes=32 time=2487ms TTL=64Reply from 192.168.1.1: bytes=32 time=1ms TTL=64
Reply from 192.168.1.1: bytes=32 time=2ms TTL=64
Reply from 192.168.1.1: bytes=32 time=12ms TTL=64
Reply from 192.168.1.1: bytes=32 time=2ms TTL=64
Reply from 192.168.1.1: bytes=32 time=2ms TTL=64
Reply from 192.168.1.1: bytes=32 time=1ms TTL=64
Reply from 192.168.1.1: bytes=32 time=1ms TTL=64
Reply from 192.168.1.1: bytes=32 time=1ms TTL=64
Reply from 192.168.1.1: bytes=32 time=3ms TTL=64
Reply from 192.168.1.1: bytes=32 time=1ms TTL=64
Ping statistics for 192.168.1.1:
Packets: Sent = 344, Received = 344, Lost = 0 (0% loss),
Approximate round trip times in milli-seconds:
Minimum = 1ms, Maximum = 3031ms, Average = 41ms
Control-C
^C
C:\Windows\system32>
I tried changing the security settings to WPA/TKIP just in case this is an AES performance issue, but that didn't make a difference.
I contacted DLink support, but their 1st level support didn't add anything insightful, just went over what I already did, agreed that there is nothing else to try and told me to call back again when the 2nd level support are available.

Not sure if anyone else has seen something similar. I am tempted to walk in to a local Best Buy and pickup another rev A unit to see if it is just my unit that is defective or if it is a rev A issue. If I can find a rev B I will also get one to see if that makes any difference.
As always, any additional insight is appreciated.